I have yet to sand a finish (speaking of furniture) that it didn't dull the finish. I sometimes will go over a piece with 1000 to 2000 grit, (yes thousands) to remove the nibs. I even do that very lightly! But if I sand a single spot more than just a little, it's going to show. And I have had no luck touching it up. I have just worked on laying down a better surface with no runs.

I have not tried this, but I read about polishing varnish with automotive polish and a polisher. The results were spectacular. I have the article somewhere.