Yep - found my rottted frames last year around the same time. Only difference, mine were rotted out for about 2 feet, right over the axle tube - basically the entire outer wall of the tube frame was gone - - -
SCARED THE CRAP OUT OF ME!!!! Found it the week before leaving on a 20 hr round trip, one-week holiday in Minneapolis. I talked to a body shop and they assured me it was a pretty common problem on these vehicle. They told me not to panic, considering the frame didn't get that way overnight, and I had obviously been driving on this for a couple of years already.
So, I originally contimplated doing the work myself (like you describe), but after seeing how bad it was I ended up taking it to a body shop. They had done a number of these before, but they said mine was easily the worst they'd seen. Cost me close to $2K (canadian) to fix.
After that time, I've checked out a number of similar aged Pathfinders and sure enough, many show signs of rot in the exact same place. The problem is, as you also noted, that the damage is hidden behind the rust coating. Mine looked minor too until I took a screwdriver to it.
As to the cause of this common problem, I think the holes in the outboard side of the tubular frame rail do not help. They allow all the road crap to splash into the frames. The interiors of my frames were loaded with about an inch of sand and other road debris - all wet and crappy - perfect place for corrosion to happen. After the fix (which included the holes being covered), the frame was recoated from the exterior and the interior coated with an oil to prevent moisture build-up on the interior.
Anyway, glad to hear that your damage is minor. Fix it (or get it fixed) soon, and I'm sure you'll be good to go for years.