Generally when you see any content which is unfit for the site such as spam or rude/abusive content, you should flag it as spam or rude/abusive and move on. Spam or rude/abusive flags have the special effect that when a post receives 6 of them, it will automatically be deleted and penalties will be automatically imposed on the author to prevent their return.
Flags for moderator attention should not be used for spam or rude/abusive posts since spam or rude/abusive flags show up for moderators anyways, and spam or rude/abusive flags have additional penalties that moderator attention flags don't. Moderator attention flags are dependent on a moderator being online and seeing the flag, while the other two can cause the post to be deleted without moderator action.
You should avoid editing such posts to hide the rude content as that makes it harder for future users to flag it and means that the post will stay on the site for longer.
It's also best to avoid using normal delete-votes on such posts because while a normal deletion will remove the content from the site, a flag-triggered deletion will prevent future occurrences in addition to removing the post in question.