Stupid Drywall Question

I use sanding sponges but the trick I learned was to use a set of scissors to cut the corner off the 90. It's too sharp and will dig out the corner and cut the tape.
Cut it evenly to leave 1/8 or 1/4" wide gap between the paper sides. Later you can come back with some paper wrapped around a small dowel or just loop it and lightly sand the inside corner to make it straight.
Also, I would just sand off the high spots and add more mud to feather out the joint one side at a time. Trying to sand out compound like it's bondo will drive you nuts. I've found it less aggravating to add more than to have to take a bunch off. Ymmv.
If you finish out one side at a time you can get good tight corners. If your first side is decently flat and straight, you can drag your knife lightly along it when compounding the adjacent wall. Once that's done and dry, a final skim down the sharp corner with your finger to make an even radius can make it look pro.
For a super narrow area, you can use pretty much anything as a knife. I've even just ripped down paint mixing sticks before.
Depending on the compound it can be tough to recoat without the base softening and making life hell. One thing I've done when this happens is to use some PVA primer to somewhat seal what's there before skimming some more on. I also PVA everything before final paint. It really helps keep the compound from soaking up all your paint like a sponge.