Steel wool can leave steel splinters, dust etc. It's especially bad if you use water based finishes because the splinters can rust. The sanding pads are cleaner and won't leave a residue that can react with the finish. They are also cleanable, so last considerably longer than sandpaper, and come in different grits.
I was not aware that working with bone (other than nuts) was similar to working with wood. Fortunately the prognosis when working with guitars is generally good, and the patient never bleeds or complains.