When dealing with combustion chambers, you should only remove as much material as necessary because you just lowered your compression by grinding and polishing all the aluminum away. A rough surface there won't hurt anything but lower compression will. Luckily, the 4tec motors are very forgiving when it comes to compression so as long as the valves are good and sealing fine, that head will still be fine. I would have a machine shop check it for flatness and make sure you didn't grind into any of the flat sealing surface.
Hard to tell what caused the pitting at this point since it's all ground out but I would guess corrosion.