Any sort of light sanding with 60-80 grit will definitely help wear down the layer lines, not too sure about green stuff for this kind of work. My method on all my parts has been to sand at 80 grit, followed by some primer, Bondo in the larger rough spots, then primer, obviously sanding down in-between layers. I think i work my way up to 320 grit on the final layer but im not sure, go until your happy with the smoothness.
Be warned that if you go too heavy with your primer you may remove small details your trying to keep, I made the mistake of doing too heavy of a spray and almost filled in some of the "detail lines" on the dome of the helmet.