rusty turbo exhaust housing
 

is there anyway to clean the rust and protect it from the future rust

or throw a turbo blanket on it and cover it

Get it ceramic powder coated.

Yeah, you'd have to bead blast the rust and then coat it with paint or powder coat. Ceramic coating (done properly) is quite expensive.

I would advise against just covering it w/ a turbo blanket but I've also seen plenty of rusty manifolds that were operating just fine. I'd coat it if it were me.

Yes, I forgot to mention, It's quite costly, but it will also help with heat. If you did get it coated and also put a blanket over it would yield you the best results. If you did nothing and just left the rusty manifold, youd probably be fine as well. I would coat and cover.