I’ve experienced rust down a steel seat tube like this but not quite as bad. That’s mingling down there :o) So at least you’ve escaped the stuck seat post which can be a ball breaker to remove. The last time I encountered this I cut up a length of mild steel rod ( a bit of wooden dowel would do) & jammed a ball of Scothbrite or green pan scourer in the end, mounted this in the battery drill and it gave the seat tube some reaming action. Took a couple of minutes but it very quickly gets rid of the rust.
@Paton has beaten me to the recommendation for the XCP Rust Blocker. If you’ve ever unwrapped a brand new industrial ball bearing from its wrapper you’ll recognise the smell straight away. Looks & smells like Cosmoline which has a proven track record. The XCP sprays on as a thin brown liquid and eventually forms a protective waxy coating that doesn’t wash off, very like Weagles Frame Saver spray but affordable. The ACF50 is great in applications where you don’t want to see it, IE on your motorbike but does get washed off despite what the marketing would have you believe. The XCP is in a different league provided the film doesn’t get breached.