Re: wet sand
You can compound by hand but I would move from 1200 to 1500 to 2000 grit if you plan on hand buffing. Then you can use something like Turtle wax buffing compound.
Me personally, go over it again with 1500 grit then I would get a high speed buffer from Harbor Freight $40-50, 3m twisted wool pad ~$15(from napa), 3m Perfect It 3000 ~$30(from Napa), then a good wax. You'll have around $100 in it but then you'll have everything should you ned to do it again.
It'll come out to look like this when done. I haven't waxed it yet in these pictures.