Holy hell that is a lot of rust. Awesome learning project to tackle though!
Not saying this is gospel however my thought would be to first reinstall the fenders and front end and make sure everything is lined up as close as possible.
I think I would try to avoid lifting it any more with that engine hoist from the core support. I would want to try to avoid any risk of tweaking / distorting the remaining uni body anymore than needed.
After you have all the panels on and aligned I would look at taking square tubing or something to tack in, square up and stabilize the front end. Then look at removing the damaged metal for repair. Maybe something like a front tube kit might be cool on there, not sure if you want to go that route but there is a few out there available. They are definitely not something that I would daily drive however due to the safety concerns of removing the fender and up crumple zone metal.
Here is one from Team Z:
http://www.teamzmotorsports.net/product_p/tzm-tfeu-94-04.htm
LMR sells a few Fox frame kits that can be made to work for repair on the SN95/New Edge chassis also:
https://lmr.com/item/LRS-FRLH780/1979-93-Mustang-LH-Oe-Style-Frame-Rail
https://lmr.com/item/LRS-FRRH880/1979-93-Mustang-RH-Oe-Style-Frame-Rail
Very similar designs and can be made to fit with just a bit of work and imagination. Otherwise make sure everything is supported and squared up before you start cutting into the frame areas needing repair. Other options would be to find a front half and look at stitching it together but I think that is going to be a lot of work. Though a lot of work is what it looks like you have on your hands there.
I'm interested to see what direction you go for repair, should be a fun project!