100% agree on the process (with the fine files). I haven't tried steel wool yet, but might - presumably it leaves a little bit more of a burnished look than sanding?
In the old days, someone at gibson made the necks on the end of a belt sander (probably something high speed and industrial). Their profile has a bit more refinement than fenders (you can pay high dollars and get fender to make any profile you want, but a $1.4k guitar becomes $3K, and there are no buyers for used custom guitars, so you'd better like it).
I think if I had a full weekend, I could make a very good fender style guitar fret work and all - from rough, without power tools for anything other than the pickup pockets (the market is strange about wanting perfectly clean cavities with no evidence of hand work - makes no difference, but it's not an educated market). Fairly sure if I made a nice profile neck ("custom shop" type profile, which is pretty absurd, they should all be profiled like that) and a tight fit and did great fretwork and then hand varnished the guitars, 90% of the market would complain about the varnish. I've posted pictures elsewhere and someone noted that I "left rough spots on the wood and need to do further finish work to it" (that's actually the surface unevenness of the varnish - it feels divine compared to a glassy surface).
I don't work to your standard, for sure, and on things like plane handles, you can feel that I left them right off the card scraper (I actually like that). I might do the same with a guitar once I've made enough of them, just to see how it feels - you'd never get sticky hands on a guitar neck. That said, I do all of the curved surfaces once and then after a break (next day or hours later or whatever), I look over all of the curves to see if anything catches my eye. I love the fine files for that kind of finish work, whether they're a small saw file or a swiss file. so much more control. Too much sanding, and the surface looks like cellulite legs at the beach, or just bland.
There is some thinking to do about whether or not I can modify some of the details on these guitars to look more like hand work without making a complete abomination (think F-style mandolin - which is the instrument that George complains about the most when I talk to him, a complicated little guitar with lots of sharp edges and tight curves to bind).