No Pamela you did not over do #1. You are feeling the grain of the wood but this is no problem. Oak has a course grain. If you sand with fine paper you will remove shellac and it will have to be replaced. Before doing anything else use a good paste wax like briwax and fine steel wool for the application. Try this in a small area first. The finish will appear cloudy after #1 and sometimes #2 but will go away with french polsih or waxing. Also try a little french polish Shallac and linseed oil and this will blend the shellac better with the old. What we are trying to do is fill in shellac to level to a smooth feel. The only way to get a complete smooth surface is to sand until all si smooth and flat and recoat with shellac but this is usually the last resort. Just remember if you sand you will have to apply shellac in that area until it is level with the rest of the finish.
Skip