Wet sanding is a very serious step and I wouldn't recommend that unless major repairs have been carried out. The last place I worked we had to wet sand the boat hulls because they had been cured in an oven and the pattern of the first cloth layer would 'print through' to the surface, but we only ever started at 600 grit and then worked through 800, 1000 and 1200 before polishing. I suggest you try just polishing to see if the sanding is really needed and, if it is, try starting at a higher grade than 320 to see if paper that coarse is really needed.
Anyone who wants to see if polishing will work can try doing a small patch by hand. Purchase a 'rubbing compound' for paint
at an auto parts store - sorry, I can't give any trade names as they aren't the same here! Beware of liquid compounds - these are often much finer paint finishing products - a paste rubbing compound is my preferred choice. This is not a wipe-on/wipe-off product - a 6" by 6" square is about as much as you can do at one time by hand and that will require maybe 1 to 2 minutes of rubbing. Polishing something the size of a trailer door can be done by hand, but will take maybe half a day to do.
3M compounds for boat gel coat polishing are very good products that work quicker than most, though of course you do have to pay the usual 3M premium.
And, Roy, I second your comments about painting
fiberglass - to me, it is just like painting
over varnished wood - something only to be done as a last resort.