I have yet to see any oxidiztion that has required wet sanding. I think that this was a way for the boat dealer to throw up some smoke and mirrors to get the business.
If you have a PC I would start and cut with a light cut compound and a cutting pad. This should lift the oxidiztion then polish with a decent polish. I did one with
PB P-W-C that was killer, then followed up with a sealant
On the red stipe area do that all by hand so that you can see if you are lifting paint or the stipe. I doubt that you will have any problems.