On the outter lip I now have a 1.5 inch area with small divets. I am wondering if I should try to sand the spot smooth.

Wheel is chrome on aluminum.

 

lets see a picture

 

I don't think it would even show in picture. I tried sanding a little on it with 360 but that didn't do much. Might try some 220 and then 600. It's pretty minor damage but you know how it is when something perfect get dinged.