Sandpaper is the last resort, and personally, I wouldn't use it unless glued to a pencil eraser for spot work. The imperfections are below the level of the paint so sandpaper is gonna take off too much, or all of the paint before finally reaching the target area. A magic eraser works wonders on blemishes, and is actually a very, very fine grit sandpaper in sponge form. Meguiars Ultimate by hand is safe for all levels of use. Cable rub type damage is the trickiest because there is rarely a hard edge to contain your touch up. Chips hold the paint well as long as you're patient. White paint is actually tricky to match.

I would remove all components as well. It makes the job much easier and you can't fix the area around the headset unless you remove it

Clean and brighten the paint
Neutralize the rust without collateral damage
Touch up

Yours is a tough one