If you do like brian6pac said, then you need a known very flat and stiff piece of metal to use as a backer for the sandpaper. Sanding without this can result in more low and high spots than you started with; without it, you have no control where the sandpaper is digging in. Having tiny ridges like what appears i the pix is not a big issue on this level of rebuild IMHO; heads seal up well all the time with tiny ridges on the surfaces. Head and block flatness are the first and biggest concern for you. (Which is what I think brian6pac was really getting at, with looking for high spots.)
If you use a gasket sealer, what you show in the original post is not what you want. You want a can of spray-on Copper-Coat. The 1121G gasket has a sealing surface on it, so you should be good without sealer, but it won't hurt to add a very even, light coat of Copper-Coat.
