You may already be familiar with this rudder conversion to Fenix, a Cape Dory:
Notice that he removed the original rudder--probably more to accommodate the prop than anything else, but uses a heavily reinforced skeg. I think a transom-hung rudder would also need a skeg of some kind. I have rarely seem boats with freely-hung spade rudders that do not show stress fractures at the point that the rudder post enters the hull. Obviously the forces at that point can be enormous. If you are seeing rust weeping from the spade rudder, I would question the alloy of stainless used as well as the welds to the internal webbing.
I would encourage you to add increasingly wider layers of 24 oz biax cloth to the rudder/keel joint (after grinding away the gelcoat layer to both the rudder and the keel to get to solid glass. If you are merely fiberglassing to the clean gelcoat, the layup will have little strength and eventually tear off the gelcoat layer.)
I would use at least 6 layers of biax, each overlapping the previously epoxied layer while that layer is still curing. I would make the complete layup at least 14 inches wide.
Good luck with the project and please post more pictures when you can.