A 1 1/2 inch group sounds like a very good group to me, especially if it is 100 yards with open sights. It also sounds like it meets Finnishspecs now, not taking into consideration that it was probably heavily used after it left their arsenal.
Must second the opinion that the gunsmith isn't a very good one to advise you to clean the bore in that manner. To polish by it's very nature is the removal of something, to get a shine, you have to remove metal. As that cleaning rod gets further into the barrel, it is going to flex and rub on the interior and cause irregular wear.