JMO, but if you sand it enough to smooth it out, the skin over that former/bulkhead is gonna be really thin...

Granted that the skins of WWII warbirds weren't all that smooth, but it looks to me that if you scaled up that "bump" it would probably be the equivalent of a couple inches high?

I would try and carefully peel those 2 sheets of skin off and take the high spot (of the bulkhead ) down.