How much work do you want to do?
I took the vinyl letters off the transom of my boat last spring. Same as for you: the gelcoat under the letters was actually "raised" above the surrounding exposed hull. I didn't want to sand only that portion of the hull, as I was afraid it would become a different color than the rest of the hull, and I certainly didn't want to sand the entire hull as it didn't need it (not to mention that I really don't like that kind of work). My compromise was that I applied a fiberglass light compounding product with an orbital buffer only to the area around the letters. After doing this, if you were more than 6 feet from the transom, you had to look for the shadows of the old letters to see them; they were invisible from more than 10 feet. After a full season in the sun, the shadows are even less apparent. In sum, unless you want or need to sand the whole hull, try something less drastic first.