Having a look at your fret photo, there appears to be a small rough area on the first fret, though it may just be a reflection.
Unless you remove all the cross-fret marks from levelling, you'll get very scratch feeling frets. When checking my fret polishing, I take an offcut of a top E string, hold it between my thumb and first finger and run it along the top of each fret. If it catches at all (which you can easily feel), then your strings are going to do the same. There have been several times when I've finished the polishing, done the test and still found that the string end catches. Then it's back to the P240 and rubbing along the length of the fret until those deep nicks have disappeared and running up through finer grits until they can be polished. The current kit guide skips out the coarser grit part and moves straight on to the polishing (making some assumptions that few inexperienced people will make), but wire wool alone will not remove the deeper cross-fret marks.
I use P240 as my primary scratch remover grit, rubbing each fret the same number of times with it to help keep the heights equal, and then stepping up through a few strokes each of P400, P800 and then through my micromesh grits selection. I always go up to the final 12000 grit micromesh, but 4000 is really fine enough. The rest is just to make the frets look shinier. For a final polish, if I've still got the fretboard taped up, I use a metal polish, normally Autosol, though Brasso works just as well (if a bit messier in liquid form).
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