Regarding sanding/shaping:
Proper sanding blocks are key to blending.
Never just fold sandpaper over and think you can flatten out irregularities, all you will accomplish is moving them around.
I've fixed crown molding like yours. Before I started I spent an hour or more making 11 1/4 inch long sanding blocks to fit in each curve in the molding, and ultimately used very little filler to make the joint invisible.
Proper sanding blocks are key to blending.
Never just fold sandpaper over and think you can flatten out irregularities, all you will accomplish is moving them around.
I've fixed crown molding like yours. Before I started I spent an hour or more making 11 1/4 inch long sanding blocks to fit in each curve in the molding, and ultimately used very little filler to make the joint invisible.