So I noticed I have some rust occurring where one of the engine grounds are. How should fix this? Im guessing sand it down, but is there something I should apply over it once sanded down to prevent future rusting? This is where the ground wire connects so would applying products effect having proper grounding??

thanks in advance

those area always rust.

U can put some grease on it.

Sand the surfaces down to shiny metal and re-bolt them together to get a good connection. Then, if you want to prevent future corrosion at that spot, you can smear some grease over the area. Or get fancy and use a spray sold for for battery terminals.