i never use a dremel...always by hand.
yes afterwards a trained eye could see easely it is not the original. If you want to get rid of all the dents, you have to sand till they are all away...and that is somethimes to much. So the proportions of the case will be differend afterwards..you can see it on the glass..it lays somethimes deeper in differend places.
a nice exemple is my accutron...see forum "watches with hands" there was a deep dent at 8 o clock..i sanded it a little but left it there. I had to sand to deep if i wanted to get rid of it and it have effected the bezel appairences. Look out..really bad english here
if you want to do it as good as possible..you have to get rid of the glass. Then if you not have to original watch..you have to study all pictures from the same watch..so you have an idea how it looked like original.
most of the time i only use my hand, the flat surface of the tabel and a piece of wood to help the sanding paper give even pressure. That all. Yess it takes some time and experience..but after a while you know excacly what paper you need to do what you want.
so in case of your seiko..if you want to get rid of all the dents..you have to go deep and rub so much material away you end up against the side of the glass...so thats not good.
if i see your case, i pretty sure, it has been sanded a few times before..so watch out, you don't go through the last layer and it becomes goldich. I don't know it's ss all the way.