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I've used a bottle full of hot water before, that works pretty well.

Be very cautious with the iron, when leather gets hot and wet it has a tendency to shrink!

I wouldn't try that, or only very quick taps on the dings with the nose of a fairly cool iron.

Depressions shouldn't cause a problem when stropping, whereas raised areas would. I would wet it and roll it with a glass bottle or jar to make sure the majority of the surface is as flat as possible.