The red paint on my mk2 is pretty faded. I might start compounding. However I see spots on the bonnet where a white colour is coming trough (base coat?). 

Does this mean I have too little of red paint left on my car to start compounding? Or can I just compound around these spots?

it will be primer showing through

 

can go around the spots as long as you realize its not going to get better in those spots as it worn out