Hello Demi,
Ok, so your neighbourhood is still safe from pool shooters!
As for the rusted area - must have been leaking for a very long time. Since it sounds like the rust extends down to the floor bottom of the wall, there isn't an easy fix per say, I would patch it on the outside as I had stated before - at least to get you through the summer.
Since your pool is 12 years old, the liner is likely on it's last legs anyways, so there are several options available to you.
Next spring - instead of opening your pool, drain it and remove/toss the liner, inspect your pool wall - likely there will be more rust, possibly to the point where you will have to replace the pool, however, in the off chance that this is the only bad spot, you should be able to clean up the rust, prime the spot, then cover it with a piece of galvanized sheet metal fastened to the inside of the wall - using JB weld or a similar product, make sure you get a good amount of overlap beyond the rust spot. Cover this in a paint on tar that also overlaps to the original pool wall. You can then cover the edges of this with duct tape to eliminate any sharp edges that may be there.
Check the floor of the pool for anything that may have worked it's way up through your base, maybe add a little sand if you need it, order a new liner, install it and fill - your pool should be good for another 10 years.
If you do need to replace the pool, Vogue makes beautiful pools with many advanced features and benefits not found on your average pools - prices are about the same to a regular AG pool.
I would recommend you address the new pool issue again in the spring should you need to do so then.