I stopped using a spray finish on my guitars years ago due to having to wait to get the ideal weather to reduce the orange peel and for the last 10 years I have been using wipe on poly. For the last 5 or so years have been using water base due to the ease and cost of cleanup and due to the fact I use water for thinning plus I can do it inside due to the lack of smell. I make my own wipe on by diluting it 1 to 1 and sometimes I may use a coat of 2 parts water to 1 part poly just to remove any minor blemishes. I use lint free cloth, normally Chux, as I get it in a roll that lasts a long time. Current roll has done about 5 guitars and will probably finish off the 9 guitars I have remaining.
When I used to wet sand a guitar I used to plug the holes with Vaseline which also lubed the hole for when I screwed in the screws. I have also used Shellite for wet sanding as it doesnt make the wood swell but it has to be done outside and maybe with a mask.
Once I discovered Scothbrite pads I never use any form of sand paper but using wipe on poly I can get by most times just using white pads but sometimes I may start with the maroon and finish with the white before buffing but of late I like the satin finish especially on the back of the neck. I only ever use 3 coats on a guitar but if the wood has an open grain I may use 4 coats just to fill in the grain. When I used to sand I never used any paper that was lower than 1500 grit and maybe why you have sand throughs. The smoother the application of finish the less number you need to apply.
You can use a orbital sander with Scotchbrite pads, just cut the pad to size, but I use a random orbital sander with a felt pad that I have used with polish which gives a good finish but now I normally use the sponge rubber buffs using my battery drill on low speed, never use the high speed as you will more than likely cut through the finish if you have little or no experience in such activity. Never just buff in the one spot trying to remove marks, always keep the buff moving and don't use any pressure, just use the weight of the drill and keep it moving. Cannot say that enough, always keep the buff moving. Don't be scared to just polish by hand rather than using a device. You have to be really heavy handed to polish through by hand and if you do then maybe making guitars is not for you. You can use the buff to do belly cuts and the such but you have to angle the buff so as your just cutting on the edge and not the whole face but you do risk sand throughs.
Never buff along a corner, always buff to the corner but never over it as you will just remove all the finish and be buffing the wood. If the edge has a radius buff to the radius and do along the radius by hand.
As for pulling the electronics I use heat shrink. I used to use clear plastic pipe but found sometimes you may pull to hard and pull it off the pot. I use heat shrink that the shaft of the pot just fits into, push the shrink into the mounting hole and use a piece of wire with a hook on the end and pull it out of the F-hole. Push the shaft end into the heat shrink and shrink it onto the shaft. I use a heat gun to shrink it as I dont like using a flame, and I have never pulled hard enough to pull the shrink off the shaft.