First of all, thanks for all the input from you seasoned axe vets so far on all my questions, I appreciate it very much!
Grimalkin, don't 'go right to town' on this cosmetically unless you're praying for it to sell for big bucks on flea bay and/or are merely wishing to impress your friends. Whether it ever gets used or not, a light misting with WD-40 every now and again will keep this looking like the day you bought it, and 'shining it all up' to look like a mirror, or a brand new head, isn't going to make it chop any better.
Whoever had it before you (novice chopper or a naive seller?) used a grinder to make a thorough mess of the blade.
Ya that edge is a mess, no big deal for the Simonds

I don't plan to re-sell this ever, but I do want it to look decent, I hope to pass this onto my kids or grand kids some day (it will be a user, probably my pack axe). I took a hand sander to it today, and I wanted to get some opinions on what you guys think. The small little micro pits are more annoying than the bigger ones... and I am a little concerned about rust forming in those pits over time.
Original condition when it arrived:
hand power sander with 40 grit for about 60 minutes total.
A part of me really does want a nice smooth head, it wouldn't take that much work with the 40 grit I don't think. But I do want to keep that strike looking good. Would be okay to sand around it? The bit needs much more sanding than the post, if I just sanded the bit would that be an issue with taking off too much steel up front? I wouldn't think so, but I want to get advice on that before I do it. Thanks.
Also, I would like to know more info on how this axe was made, the steel is folded over on the bottom, something I haven't seen before, is this normal? I assume this is how they made them back then, and the finish was sort of rough.