My goodness. That bottom edge was fiberglassed within the decade and look at it now.
We must literally claw out the rotted wood, mostly using hammer and chisel since there is too little space to attack it with our Fein Multi-masters. RJ is building an ever-higher mound of black rot on the floor beneath the transom.
We must remove the interior framing, which means releasing every fasteners passing through the bottom planking and up along the transom’s sides to the waterline.
Once the rotted frames have been excised, we must carefully remove the entire transom from starboard to port and from keel to waterline. We are good at the Dutchman repair, but will be expanding horizons on this one.
Bottom line, and I rest my case, please, please do not slap fiberglass onto your wood boat. What little you might gain now will be shocked a few years hence when the damage you are almost surely inviting now erupts.