Scrape the loose paint off the rusty flashing and any loose caulking. You can do this with a putty knife. Prime the rusty parts with a rust inhibiting primer. Then caulk smooth using an acrylic caulk and repaint with your trim paint. You don't have to remove all of it - just the loose stuff.

Thanks. Off to Home Depot!!

That 'header' is a steel lintel. Don't spend much time priming and painting as it will continue to rust since the back side is exposed to the moisture in the brick. The rust will grow between the steel and the coating and next year it will look just like it does now. Much better to just paint the lintel using an oil based finish the color of rust. That way you will not notice the rust as much. Try to match the brick color which naturally looks like iron oxide (rust).

Cutting out and redoing the old caulk joint is a good idea since it is already rather large.

Randy is true about the Lintel Iron above the window. With no disrespect we see these daily. We use an angle grinder to knock off the rust and scale. We then coat it with a rust inhibitor and then a good coat of primer and exterior Rustoleum paint. Let it dry and caulk up the gap with Quad urethane caulking. You also have to make sure the Lintel Iron front edge is caulked and made water tight. If this is done right we've never had the problem re-surface. If you've never used an angle grinder have someone else do it or have proper eye & ear protection. This is very important!!!!!!!