It looks like you are sanding along the edge instead of from spine to edge as in stropping. Do you just follow the natural curve of the convex edge as if you were sharpening with a stone, or are you just hitting the edge?
I am probably oversimplifying when I say "I just sand along the grain", but that's really just it.
However, there really is more to it than just that. There are 2 things happening at the same time, polishing and sharpening.
Steel does have a grain, and the scratches are less significant if you sharpen/polish along the grain, and not across it.
Plus it's a heckuvalot easier to sand and polish that way. The mousepad method is a great idea for smaller knives, but for khukuris, the tail needs to wag the dog.
In answer to your other question, I am sanding everything: the edge, the face, the shoulder and even the spine sometimes. When I get to the edge, I ease up on the pressure a little and let my fingers extend over the edge a bit. You probably can't tell in the video, but I'm really bearing down on the steel quite hard when I'm sanding. It is at such a high grit, there's really no need to worry about leaving deep scratches.
Do you form a burr and then switch sides?
Yes. However, I don't check it every few strokes like you might have to with a stone. I just sand until the sound of the sanding changes. That is, you get to a point where it just starts sounding smooth - no longer makes that scccrrrratching sound. Then I flip it over and do the same to the other side.
It really takes a lot less attention than it seems. That's why I do it while watching a movie (comedies are best

). I've done all 5 villagers in the same fashion so that they all can get similar results.
Now, that said, don't expect a magic finish on khukuri when you're done with it. For that, you really need to use a buffer loaded with compound.
This is more of a "working finish" which means that if you screw up the edge out in the field, or tarnish the blade, you can clean it up and sharpen it quickly and without much effort.
Dan