Nope. The plastic or acrylic dust is harmless. Plus, I have really good flow in the tank. The small amount removed for the viewing panes during the process is barely noticeable in the water column and the corals and fish didn't seem to be bothered at all. For coraline, I use metal blade scrapers that are typically used for removing coraline on glass tanks. I removed the coraline before I began the scratch removal process. I would strongly suggest removing coraline before sanding as you are likely to create more scratches trying to remove coraline by sanding it off.
Here is a thread I started some time back that documents the entire scratch removal process and includes pictures and videos showing each step.
http://www.reefcentral.com/forums/showthread.php?t=2538092