I usually use what I can find. My shop's kinda like that. I think the 'preffered' sandpaper would be a fine grit metal type sandpaper. You could also use a fingerboard file. You know, the sticks women seem to always be using on their nails. That works pretty good.
During the points life, pits and bumps develop on the point's surface. The point(ha ha, a crack myself up, points, the point!!) is to file off any bumps which would intefere with gapping the two surfaces. You basically want them flat so there is a fair amount of surface area that is contacted when the points close. Do what's practical, this ain't rocket science.
BTW, I know I did not mention setting the timing. If you want me to I can write another even longer post about setting the timing. If it will help, I'll gladly do it.