I didn't really notice it much before stain but now its all I see. I had a few people look at it, most said its not that bad. But I didn't spend all this time and money to make the floors 'not that bad'.

Anyways I rented a drum and edger from HD, and it took forever to get the first layer of crud off. I incorrectly used the drum causing these marks I believe.

My questions is should I go get a orbital and get back at it. (60, 80, 100) Or just continue with poly?

 

You are pretty much going to have to answer that on your own

If you resand to get it nice and level, you need to sand back down to raw wood and restain. You will still need to sand with a buffer between the 1st and 2nd coat of poly and any more that are applied. The defects in the floor will show less if you use a satin finish, more if you use gloss.