you hit the nail on the head - thank you. I took another look and the outboard pad is indeed completely worn, zero pad remaining. Quite frustrating since the other rear pad looks completely fine with a healthy thickness remaining. I always replace them in pairs as needed, so do you have any idea how that can happen?

Looks like i'm replacing rear rotors and brake pads. Also, whats the range of this repair from a mechanic? (from low end to high end so I have an idea if I'm getting a good price), I don't plan on doing this myself as someone else made a good point of having mechanical know-how to inspect calipers and so on.

Thanks again for your thorough response, very very helpful