Kirby, your understanding of the process and your situation is like 99% on-the-money. There are situations where imperfections are so deep that they are impractical, or impossible, to completely eliminate. Sometimes, it is possible to "cheat"...a little. You are absolutely right, digging-down to smooth a small, localized, area, or sanding freehand, will create waves that will be about as easy to ignore as a fart in a pantomime horse costume.
The upper LH area I've highlighted in red is good example of how you might be able to "cheat" the area between the red lines. Removing the material necessary to reach a smooth surface can be done in a way that creates a natural concave area, that can then be blended into the surrounding metal, smoothed & polished. Continuing to remove metal, straight-across, could possibly weaken the casting. I'm not so sure it would look quite right, either. And, speaking from experience, the amount of hand sanding required is making weary just thinking about it.
A polishing shop (including most chromers) would be able to do this part in a couple of hours, tops. They also have six-digits worth of specialized machinery & equipment, along with decades of hands-on experience. I've amassed a locker full of metalfinishing/polishing tools, equipment and compounds...and am still
nowhere near having the full capabilities of a polishing shop. Regardless, the process remains the same...level, metalfinish, polish. The big difference is the amount of this tedious work can be mechanized. Those rubber sanding blocks are the right tools...for the fine detail work. When they are your primary equipment...well...what you're experiencing is normal and to be expected. Otherwise, farming it out would make more sense than trying to set yourself up with enough new equipment to make the job less painstaking.
I think the little divot below the "H" can be "cheated" with careful feather-sanding, i.e. long strokes to blend the overall surface, while concentrating the heaviest metal removal in the immediate area. The other approach would be to sand the imperfection out, then blend the surrounding surface are flat enough to get a wave-free surface. That latter method is riskier. Either should work. Believe it, or not, that beveled face around the perimeter of the flywheel cover is one of the more forgiving areas of this part. It's possible to restore the bevel width, close enough to satisfy the eye. Follow that by softening the sharp boundary edges at the buffer (tripoli will remove material from sharp, convex, surfaces very effectively) and you'll end up with a very-convincing, liquid-smooth (visually) part.
The ugly truth is that not every surface flaw can be completely eliminated. If the scarring is too deep, you can be faced with a choice between living with a flaw, a noticeably deformed part that doesn't look right...or a weakened part. If that weren't enough mental anguish, different alloys have different finishing/polishing requirements and the "perfectly polished" surface will look different, due to the actual crystalline structure of the metal, what some refer to as polishing "down to the rocks". I do have a way of taking away the "bottomless pit" feeling that comes with complex polishing tasks...concentrate on one, small, area. Do whatever it takes to bring it as close to perfection as possible. It's less overwhelming to work on one small flaw. And more importantly, it's a good way to see what a reasonable expectation is for any given item, until you've done enough of them to know beforehand.