What are 'water marks'? Best way to get rid of them?

OK, thanks, snowking, I took a look at Mike's picture thread on water marks, etc. and I definitely have them on the trunk lid of my 1990 BMW. The problem is that it's single stage and the paint's very thin (has worn all the way through in a few places on the lid). I'm afraid to use any compounding on the water marks for this reason. Any ideas out there? One thought I had was to try Optimum's Hyper Compound or Hyper Polish (I already have the Optimum Compound II but haven't tried it).
 
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