Al, the HA-19 is one of five Japanese midget submarines that participated in the attack on Pearl Harbor on December 7, 1941. HA-19, with her four companions, was supposed to penetrate the harbor and attack the U.S. Pacific Fleet. However, none of the vessels managed to damage or sink any U.S. ships. 
HA-19 developed problems with its gyrocompass, forcing it to make a visual approach to the harbor entrance. It ran aground on a coral reef. Draining its batteries attempting to back off the reef, the boat was abandoned by it's two-man crew. Scuttling charges failed to work. The boat, with one crewmember, was captured by U.S. forces.
The photos were taken days after the attack, so there shouldn't have been much rust.  It appears to be sand and maybe salt residue.  As far as the filler goes, that is Gunze Mr Desolved Putty.  I put it on all my seams to make sure they disappear, especially on a model of this size.