As Dona said, it's very possible that you have wood rot, especially on a 1991 model. Yes, your idea of attaching some diamond plate with long screws may fix the problem, but only for a short time. If that wood is rotten behind there, it will continue to rot and the screw will only hold on for so long. Also, since that piece behind there is probably only 2-3" wide, you don't have much and it's very possible that it's all soft, and then you'll have just insulation behind that for another foot or so.
It won't be a real simple fix because quite a bit of the trailer rests on that piece, but as long as you have a jack or two, it shouldn't be too bad. I suspect you'll have to jack up the trailer framing just a little bit to allow you to get that rotted piece out (or install the new one). I'm not sure if you could flex the framing enough to do that, but you may be able to without having to break loose any of the walls.
One tip though, you will want to measure the size of the piece of wood before you get it out so you can cut a new piece accordingly. Chances are, you won't be lucky enough to remove it in one piece or anywhere close to it, so it might help you so it can all go right into the trash can as it comes out.
If you don't want to put that piece of aluminum back over when you're done, you can sub in diamond plate. The aluminum skin has what's called S-lock, which is basically a very thin shaped S bent into the bottom of each piece. This allows for the top of the next piece to slide right up in to provide a seal and strength. You should plan to have the corners bent over the edges of the trailer to overlap the metal though, it will provide more of a water tight seal. Either way you go though, you will want to seal the corners up with new putty tape (available at an RV dealer in a roll). Putty tape from 1991 will most certainly be cracked and dried up, so whatever you pull off, you should replace. Some people report that it's easier to put the roll of putty tape under a heat lamp or warm light first, to make it a little easier to work with and stick to the metal.
Good luck with your repair and let us know how it goes.
2007 T-286SR Cherry/Granola, #6236, original owner, current mileage: 9473.8 (as of 6/18/21)
1997 T-2653 Blue Denim, #5471
1979 12 1/2' MC, Beige & Avocado, #4639
Past Sunlines: '97 T-2653 #5089, '94 T-2251, '86 T-1550, '94 T-2363, '98 T-270SR