To remove dents, you have to remove the covering. Once the model is covered, you have to live with the dents unless the covering is very damaged.

Small dents are easily removed with a drop of water and a hot covering iron. Just put a drop of water in the dent and apply the flat bottom of the iron to the dent. The water will turn to steam with a sizzle, and you'll see that the dent's gone. "Isn't that amazing!" In fact, the balsa will be slightly raised, so you'll need to use a bit of 320-grit or finer sandpaper to polish it down. The steam makes the wood inflate in the same manner that steam makes popcorn inflate. The pressure of the steam pushes the fibers apart.

Large dents require filler. Use the lightweight stuff. If the dent is more like a large gouge, then carve off the area to accept a piece of larger balsa stock and then carve/sand the piece to shape.

It all depends upon how big/bad the damage is.