I assume the keel is cast iron, and that the rough spots are smoothed over with
epoxy. If so, then the
epoxy is probably loose and splitting. If that describes the problem, then you first have to remove all the loose material. Tap all over the keel with a hammer. If the material is securely attached to the iron, it will have a more bell-like ring. If it's loose, it'll have a dull sound. Mark the loose areas with a piece of chalk. Then use a cold chisel to cut out all the loose material. Don't cut away any more than you have to. You can easily make it a bigger job than necessary. Use a wire brush fitting on your drill to clean the rust off any exposed cast iron. As soon as you finish wire brushing, coat the exposed iron with Rustoleum, just to keep it from oxidizing until you get to the next step. Then coat all the exposed areas with 2-3 coats of VC Tar, to seal out moisture. Then fill all the exposed areas with Interlux Watertite, which is an
epoxy designed specifically for use on underwater surfaces. Apply it as smoothly as you can with the applicator, because it's hard to sand it down. If you put on too much, I've found that a 4 1/2 " angle grinder will cut it down much faster than any type of electric sander. Then coat the whole keel with one more coat of VC Tar, followed by your choice of antifouling
paint. Finally, I suggest you put a zinc or magnesium anode on the keel, just to ensure that stray electrical currents won't cause a reaction that will lift or loosen the
epoxy.
Before you start, you should probably strip all the old antifouling
paint off the keel. There's a
paint stripper that is designed specifically for stripping
paint off of fiberglass cars, such as Corvettes. You usually can't get it at car parts places, such as Auto Zone. You have to go to a specialty store where body shops buy their
paint supplies.
While you're doing that job, you should probably replace the keel raising cable and pivot, and any other suspect parts. The parts shouldn't be too expensive, and there's no way of knowing how long it has been since it was done last.
It sounds like a nice project that the kids will enjoy.