With paint, then sand to make it smooth & buff to blend it in.

 

Pretty much ^. I'm planning a repaint in the future, so my touch up was just that - clean the chips with acetone, then bottle brush in the appropriate color, available at just about any parts house. Even online. If they are starting to rust, then you will need to sand the rust out and feather the area in.

 

What grit sand paper? Isn't this gonna make a scratched up spot? Are you spraying paint over the scratched up spot?

 

If the spots are rusty and not huge - like over 1/8" or so, 400 grit lightly just to knock the rust out and feather the edges. You don't have to go crazy, try to keep it contained as small as you can. You don't need to spray anything, wipe that area clean with alcohol and dab your touch-up. Most touch-up bottles have a built-in brush on the cap. They work ok.. just don't slather a thick layer on in one shot. Dap on, let dry, and if you need more, dap a little bit more. Usually the repair will level out enough you don't need to do anything else if you don't mind a little paint 'bump'. If it does, then you'll need to finish sand and polish the area which sounds a little out of your skill and comfort level. If you're up to the challenge - 2000 grit wet spread on a block so you don't dig the area again, circular motions over the repair when it's been dry a week or more - keep the water flowing while you sand - until the repair is flush with the surface. Follow up with polish (not wax - it's different) to cut the sanding scratches out, then wax. Almost like polishing headlights.. same idea.

 

I just did the rusty part nearby the GM piece of metal on the bottom side of the car. I had to use a little rotary tool (Detlev Pro with the flex shaft attachment) with grinding wheel to get the surface clean of rust to its bare metal. Cleaned it with 70% alcohol and then I used the ACDelco paint pencil 4 in 1. It's not perfect but it looks better than rust. These little rotary tools are very handy.