"May i know What I should do to properly fit the neck in place? Should I sand the neck or the pocket?"

Hi Drushkum. Probably do not do anything for a few days and let the neck and body settle. Then a combination of sanding the neck and pocket should fix it!

"Looks like there is a bit of a sanding job to do. May i know What grit should I use for this?"

For the glue marks: A gentle wire brush can be used. Then, if you are staining the top, most forum members say not to go above 180 g , though I usually go to 240 g. "Strip sanding" the glue marks could work.