Very nice write up, this would be the same process that I would suggest. You could possibly go with a lower grit sandpaper like 1200-1500 or so if your lights really need some work and are heavily scratched / pitted.

Also, prior to wetsanding, ideally you want to soak the sandpaper in water over night. You can also use drops of automotive shampoo to increase lubrication between the sand paper and your tail lights. Keeping a spray bottle of water near by is also very helpful, that way you don't have to keep dipping the sandpaper in water.

Once again excellent write-up!

George @ Detailed Image