Since all my wooden pens are CA finished I can only tell you what I do but here goes.
After my CA has cured I start at 400 and sand through 800. then using a clean soft piece of tee shirt material I apply a moderate amount of Hut Plastic polish to spinning blank. I apply at high speed using a light back and forth motion. I use a seperate cloth and I buff at the same speed. I have two bright lights mounted over my lathe shining across the blanks from opposite directions. this way if after one application of polish I can "look" and see if it needs another. JMHO but I find you get a better shine if you apply and buff at higher speeds.
BTW if just my opinion but I think that applying with a paper towel will sometimes add scratches instead of removing them.