Stay out of the bunkers! But if that isn't possible, you're somewhat on the right track. Try a polishing compound instead on a buffing wheel or sand blast the face with a small hobbyist sandblaster and cilica sand. I use meguiars auto polishes and waxes on my woods and irons religiously. Last year I sold my R7 driver that I had for 4 years and still looked brand new after playing 20-30 rounds/year. Good luck.

I just use a bucket of water and a toothbrush, but I haven't had mine for a long enough time.

Being a forged iron, those scratches and nicks will show up more than on a cast club since the metal is softer. You might try a chrome wheel polish you can find at most auto parts stores.