Pretty simple to find out if you're over thinking it or not. Remove your barrel nut and see if the flange on your extension is mating flush with the face. Equally, you could buy the $35 lapping tool, and place it in the receiver, then spin it to see if it maintains contact evenly. If it DOES, then leave well enough alone. If it doesn't, then add the polishing compound and spin it flush.
The cutting pilot is a more aggressive tool. Personally, if I had a receiver so out of true that I needed a cutter, I'd probably return/exchange it. If I could not do so, then I would buy the cutter, turn it by hand with a T-handle (well lubricated), then use the lapping tool from the original post to finish up the cut and clean up the face.
You can also use the original lapping tool to somewhat polish the internals of your receiver. Just add polishing compound to the full length, instead of gun grease.
If you DO use the lapping tool, grease the heck out of the shank, and orient it so the ports (ejection port and bottom) are pointed up so you're not drooping grease out the bottom.
