i also use those Arix steel wools for my guitars, i even tried applying metal polish over the frets (with the fretboard masked, of course) before finishing up with the steel wool. i'm not sure if this approach does any harm. any thoughts on this?
i discovered that you can actually remove blemishes and light dents on UNFINISHED parts of the wood by slowly rubbing the steel wool over the blemished part. just rub in one direction, as if you're using sandpaper.