Re: what to put between panels
Use NVH between those panels. It is not expandable and is used on new cars for doorskins to intrusion bars, hoods, decklids etc. You'll need a special gun for it. I'm in the business so I don't need to look for many alternatives. The car is not going to rot out before you are dead, so any modern substitute for the factory sponge between this panels will be fine.
Bulk drop the quarter leaving only the perimeter. The drip rail spotwelds are easily removed using a 1/16" cut-off wheel and grinding away until you see a blue heat color change from the skin to the channel. Just peel it out. Drilling out the driprail spotwelds results in unnecessary holes which makes more work. I use panel adhesive on the driprails.