I'll glaze this area just for practice and experience... I may rattle can primer and paint this area white since it wont be seen.
To seal this area I'm thinking about temporarily securing the overfender to the body then lining the inside of the overfender with tape and/or plastic then spraying expanding foam into the gap.
Then I will remove the fender and sand, fiber glass, and bondo the foam. It should have the perfect shape to seal off the gap. I'll then run sealant along the edge where the foam meets the inside of the overfender.
Finally I'll prep, mask off, and spray the wheel wells with a textured undercoat.
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