I guess my thoughts about raising the grain are in response to what I feel is causing the grain to stand up.
IMO, there is some stress in what I call the wood fiber bundles and when the fiber bundles are cut with the sandpaper (or by scraping) these fibers are free to move wherever they want too. Adding water serves to allow the fibers to follow their own whims more rapidly.
Having said this, I don't worry about raising the grain until I have the stock fully sanded to the final 220 grit level of finishing.
I want to then cut off the errant fibers cleanly without mashing them down or cutting into new undamaged bundles. (In my experiance, if the fibers are mashed down with dull paper, they will return later.)
Because of this, I use new, unused 220 grit paper VERY Lightly sanding
against the direction the fibers are pointing and never across the grain. I am trying to only remove the whiskers and to not cut uncut bundles.
You can feel the fibers direction by rubbing the back of your hand along the stock. One direction will feel rougher because the grains are pointed in that general direction.
I do this whiskering operation two or three times before proceeding on to the finer grades of sandpaper.
The first time at the 220 grit level, I wet the wood because I want the entire surface to move as much as it's going to. The second and all subsequent "wettings" are more like dampening than wetting.
I apply the water with a wet sponge followed by a dry sponge to remove the excess water.
I have found that open grain woods like Walnut often require more whiskering than Maple.
IMO the finer grades of sandpaper are used just to remove the surface scratches left by the rougher paper. For that reason, very little wood is removed so the number of fiber bundles which are cut are much fewer.
Because fewer bundles are cut, the need to wet and whisker is also reduced often to only once. This depends on the wood. Each board even if cut from the same tree, is different from the next and each will require adjusting how many times whiskering is needed. Let the wood tell you.
If you are getting almost no whiskers, or very few, you are done.
As for the grit of paper to work down to, because wood is a porous material, I feel using anything finer than 320 is just wasteing time. At this stage of whiskering, even water/alcohol stains will not raise the grain enough to worry about.
The rubbed in oil coats will burnish the wood down to the final "baby bottom smooth" condition most of us are after.
I haven't seen a great deal of difference between using a hair dryer or just letting the wood dry naturally.