My bike has been sitting out in the open for a few months due to lack of space. When I finally decided to strip it down and bring it inside, a lot of water came out of the frame. It could have been sitting there for a few months. The chain and the cables have started to rust but that's an easy fix. I'm worried if the frame could have began to rust from the inside and should I expect it to break unexpectedly in the future?
While the aluminum frame itself will be relatively ok, the problem will be your bottom bracket (almost certainly made in part of steel) which was most probably sitting in a big puddle of water. Even if the water didn't cause the bearings to rust, a freezing/melting cycle can cause damage to the bearings themselves, force lubricants out, and otherwise mess-up the bottom bracket.
Your seat stem might also have corrosion problems caused by galling between the metal seat tube and seat post to the point where it'll be impossible to remove or adjust the seat height. You will want to remove it and put some grease or other anti-seize lubricant on it.
tl;dr: You should have your bottom bracket checked out, make sure your seat post can actually still move, and clear your drain holes (if you have any).
Technically rust is limited to iron. What is bad is the rust starts and continues. The water / oxidizing agent is not consumed.
Aluminum will oxidize but it forms a protective coating. An aluminum frame will not "oxidize out".
Some iron alloys such as stainless steel prevent rust. I don't know why you don't seem to see stainless in bicycles.
Is the frame pure aluminium? Aluminium does not rust. If the frame is an alloy you would need to check whether or not the other materials are susceptible to rust.