I know about the Power Custom reamer to true it up. Fortunately doesn't look like mine has worn uneven.

I bought a 28-2 from a friend last month. He'd been holding it for a year. I knew it had some headspace issues but went ahead anyway since this is really him passing down part of his collection to me since he has no heirs.

Turns out it's going to need attention sooner than later since 20 rounds got me a little cylinder drag.

I have some washers on the way and pulled the yoke to check its face and found tooling marks.

I certainly don't want to make the barrel any shorter and cause endshake to get worse. I just want to polish. Should I use an India stone, Arkansas stone or some wet/dry sandpaper in the 1000+ grit range?

Unless you have the right tools, leave as-is. The bearing will catch to it and be the new surface.

Yep.
Unless you have a piloted trimmer to keep the face perfectly at 90 degrees, don't do anything.
You do need to apply grease to the washer. This will allow it to last forever.