One of my favorite finishes is a slight variation of what you've done. IMHO, cured shellac sands easily enough that power sanding isn't necessary. I use naphtha as a lubricant but even so, being careful to not sand through to wood will save a lot of extra work and blending as Rwhpi mentioned. If you've got a decent coat, you should be able to start at 800 or 1,000. After that, I use Micro-Mesh followed by Meguiar's Show Car Glaze.
I have no scientific proof, but I believe that de-waxed shellac mixed from fresh flakes makes a harder, easier to polish shellac than canned shellac.
I have no scientific proof, but I believe that de-waxed shellac mixed from fresh flakes makes a harder, easier to polish shellac than canned shellac.