I wouldn't hand rub Permalyn... To answer your question, I'd say "yes", you could fine sand the existing finish to smooth things out.
You didn't mention whether you used Permalyn finish or sealer, but I would recommend using sealer. Permaly sealer is just thinned Permaly finish. Soak a piece of t-shirt type cloth (about 3"x3") with sealer and simply wipe it on the stock. It should take about two minutes to do the entire stock. Make sure there's no "runs" anywhere, and set it aside to dry. Depending on humity levels, it should be dry in 3 - 5 hours. Repeat until you have the desired results. The Permalyn will also build up in any texture as well.
Ed