personally I wouldn't do any cutting unless it was absolutely neccessary. I found that claying did a great job in bringing the paintwork up. It could be the flatness is down to ingrained dirt built up over the years.
I would go through the steps you outlined as a first pass. Then if you weren't happy then consider if a cutting his neccessary. Of course without seeing the paintwork up close and personal it's always going to be difficult to make a recomendation, even against photo's.
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