I don't get the explosion thing. You get a hole in it, the air leaks out slowly. If the hole gets bigger the air leaks out faster. Where are you getting it will explode. Even if a seam is split the air will just escape. An explosion would only occur if some type of compressed fuel vapor was present along with ignition.
I am not trying to be a smart a$$ here, I just don't see it how air explodes especially at as low a pressure as 125 psi. I have never been afraid of my air compressor tank blowing up.
It's not only a matter of pressure, it's also a matter of how and where the vessel will fail. If you have ever shot spray cans, you might have noticed that some will just leak out of the bullet hole, and some will explode. Or take a balloon and stick a piece of tape to it, then poke a hole in it. This will cause a slow leak. Do the same thing without the tape, and it will pop. The difference is in how strong the area around the hole is, and a rusted pinhole usually means that the area around it is rusted and weakened too.
"Explosion" might not be the correct word for it as there's no combustion involved, it's more like a very rapid and violent expansion of the compressed air. Someone who's more mathematically inclined than I am might be able to use Boyle's law to calculate how much air there actually is in a 20 gallon tank at 100-130 psi or so. But "explosion" is a pretty good description of what can happen when all the air escapes rapidly. Anyway, a damaged pressure vessel might just leak a bit, it might crack open in a slow and "controlled" manner, but it could also explode.
The thing is that you don't know what it looks like inside. It might be ok to weld, but if it has rust and thin spots, you might actually weaken it by welding, instead of making it stronger. IMO, the bottom line is: Is it worth the money to take a chance?