If you go the Dremel route, be sure to pick up part number 565, the Dremel Cutting Kit -- Drywall and multi-purpose. That conical collar setup lets you control the depth of your cuts. Likewise, you can run it along a guide (like a ruler), allowing you to achieve consistent straight or curved detailing to a uniform depth.
As for using Bondo, it is brittle and inflexible, exactly unlike your fiberglass substrate. To offset this, chop up very short bits of fiberglass mat and mix with the Bondo. This will give it strength. You can vary the amount of fiber in the mix, depending on what your requirements for flexibility are. If able, avoid using Bondo to build any structural pieces.
A better way to add raised detail would be to use a foam that will soak up resin. Cut the foam to your desired shape, soak it in catalyzed resin, and apply, clearing off excess resin. Once cured, then use the Bondo to level and smooth it. If you are fortunate enough to have an industrial fiberglass supplier in your area, I would see what they have.
Another product to consider are glass micro balloons. They are very cheap when compared to resin. They mix in a 1+1=2 style, meaning that a cup of resin plus a cup of micro balloons yield two cups of working material. Not so with other resin extenders like gypsum. Adding micro balloons makes the cured resin or bondo much lighter and much easier to sand and shape. Beware, the resulting product is more brittle than resin or Bondo alone. You can get micro balloons from the aforementioned local industrial fiberglass supplier, or an auto body paint and supply shop (the real ones that supply body shops, not Autozone, Pep Boys, or Halfords (for you UK guys)). Online shops catering to RC airplanes will also sell it.
One final thought. In the end, it all comes down to painting it right. The right mix of base coat, airbrushed shadowing, washing, and drybrushing is what will make your armor become spectacular. Without it, your work will appear very flat. I did up a demo on a thigh piece in my armor build thread that will show what I mean.
Hope that helps,
Redshirt