A picture is worth a 1000 words!!
I'm not understanding. Is the hole in the wheel? The fender? Where the spare bolts on? Is it rust?
you have both rust, and fatigue cracks. have those cracks welded up, or your looking at a busted trailer. what ever was there is no longer there. and from the looks of the witness marks and cracks, it hasnt been there for a while
I have no way to know your welding abilities or experience, so I can not answer.
if you have no welding abilities, spend the $50 and have someone who welds for a living take care of it.
the other choice is to let it fail, and scrap the trailer.
No big deal to weld that, but the bunk support will have to be removed as the cracks seem to go up underneath. But if you have no idea how to weld then I suggest taking it to someone who does.
The hole by itself didn't cause the damage. It was what was in the hole to begin with.
... You may even consider adding some more steel to the inside of the channel to reinforce this area of the trailer.
if you have no welding abilities, spend the $50 and have someone who welds for a living take care of it.
the other choice is to let it fail, and scrap the trailer.