Several options are available to you. One thing in common with all of them is your patience and skill at wielding the tools.
A dremel or fordham work well with the Cratex wheels. I have tried them, but find myself without the feel for the tool. I just can't seem to get repeatable results easily from one side of the gun to the next.
A file is a good choice. I like to use the swiss pattern files and a fine cut lathe file. This is my prefered method. I just like the feel and control I have with files. To get the smoothest finish after I file, I use a combination of shop rolls and honing stones for the final finish.
You can even do it with honing stones alone, but it takes quite a bit longer, the results are entirely satisfactory.
I have seen some guns that I suspect were done on a beltsander. Lines didn't look all that good to my eye. Even some of the "name" guns I have seen didn't hold the lines all that well. For some people this is not a big deal, for others like myself, it just doesn't look right.
As in all things, practise with some scrap steel to get a feel for what you like best and can control.
Final surface finish of the steel depends on what your going to finish the gun in. I've used bead blasting, shot blasting, fine sandpaper grits, and diamond polishes. All work well in their propper context.