looks like you or the manufacturer have sanded across the endgrain... instead of sanding along the edges and following that around the bottom of the guitar, for each end go up and down so to speak.
sand with the face and edge, go up and down on the end, not along, and yes as you go finer in grade the scratches should go
if it was the suppliers machining and not your sanding, then it's also the way to deal with it
as for the crack, if you can get any titebond glue into it, that will help keep it strong, and timbermate to finish it off would work a treat, like you correctly assumed
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