Get a gallon of phosphoric acid (Home Depot). Cut the top off a gallon milk jug and fill it 50/50 with the acid and distilled water. Soak the entire latch (it MUST be fully submerged) in it for 12-24 hours. Let it drip dry. DO NOT RINSE IT WITH WATER.

The rust will be gone and the latch will have the proper phosphate coating. It will last a long time just like it is. Or you could paint it with matte clear. Or get a rattle can Rustoleum product called bare metal preservative (or something like that). It comes out like water - let it drip dry. I did my hood hinges like this and 5 years later no rust.

 

I sand blasted most everything on my car, but, I also know that most people don't have sand blasters. 68RCodeConv gave you an easy solution. I've actually known someone who literally wire-brushed and then sanded their hood latch and hinges to get the rust off.

For the paint, I definitely HIGHLY reccommend epoxy primer! It is some-kinda-expensive, but well worth it. I got turned onto it about six years ago by a painter. The cheaper solution is the Rustoleum (Home Depot) or other oil-based paint (not sure what Lowes sells), but I say, IMO, that you'll be way happier in the long run with epoxy.