Hey Scott.
You are correct about my preference for steel wool. I've used Scotch Brite abrasive pads also. Can't say as I care for them much. My main concern in rubbing anything out is to always have fresh "abrasive", no matter whether pads or steel wool. The problem, as you undoubtedly know, is clogging. It's just a finer version of the problems you run into with sandpaper if you use it too long and continue anyway.
The problem I've encountered with pads is that it isn't always apparent when you've worn a smooth spot on the pad, or it's getting lightly clogged but doesn't appear that bad. IMO, this gets worse the finer the grit of the Scotch Brite pad. With steel wool, it's easy to see when your steel wool is getting used up and clogged, and the solution is turn your pad to some fresh.
I don't care for 3M sandpaper either. My preference is Mirka, which I believe is made in Finland. It is the least clogging paper I've ever used. I find 3M paper to be very uniform in abrasive particle size, but it clogs much worse than open coat Mirka.
Your advice about a tack cloth is, of course, right on. As to water based finishes, if Eddie were using one, I wouldn't be offering advice about finishing. Minwax Polyacrylic is not water based. I have never used a water based finish and hope to avoid same forever. I know these finishes are common in both modern cabinet finishing and quite a bit of furniture, but I don't care.
I started my woodworking career in '78 and "retired" (read used up my back) in '95. Not very long really. But in that time, the state of California banned almost all materials I commonly used for finishing, with the exception of shellac, which I never cared for either. The state, in it's infinite wisdom, dictated low VOC water based finishes.
My feeling is that you are much more on board with a lot of modern woodworking techniques than I am, and that's something I respect. Me, I'm sort of old school. Rigid by choice, I guess I'd call it. I do feel that I know a fair amount about working wood, but I try to stay within the limits of my knowledge and experience. I do enjoy sharing my experience, which to me, is one of the really cool things about TBN.
Mike