Alright, I'm new to all of this stuff. Looks like this is the place to go and get answers! I've been reading up and I see a lot of people talking about orange peel. Now i'm curious if that's the same problems I have.

On my car the paint is fine. It's just the clear cot has started to i guess, "peel" off. I went and bought some 1500 grit sand paper to try and smooth down the edges of where the clear coat is coming off so i can have a nice transistion from the clear coated area to the non coated area.

What is the best way to fix my problem. All I want is no more dull spots where theres no clear coat. I was thinking I could just spray clear coat over the dull sput and sand it down. But then woudln't the peel of clear coat still be under neath? I DONT KNOW I'M CONFUSED! And I dont wanna mess up with my paint because I almost started to when I tried wet sanding. Any comments will be appreciated. Thank you.

If your clearcoat is peeling off the basecoat paint, then your having delamination problems with the clear. It is usually cause by:

1) Insufficient film thickness of clearcoat
2) Solvent cleaning basecoat before clearcoating
3) Sanding basecoat before applying clearcoat
4) Basecoat applied too dry
5) Clearcoat applied too dry
6) Using fisheye eliminator in basecoat
7) Incompatible clearcoat
Use of incompatible “adhesion promoter
9) Excessive basecoat film thickness
10) Over/under reduction or incompatible reducer used in basecoat
11) Going past time window for clear to be applied

Repair would be to remove the finish in the affected area, featheredge and refinish or to strip to bare substrate and refinish.

Since your basecoat (dull spots) are exposed (no UV protection) it will only get worse until you sand, recoat with base paint and re-clear (by blending it or stripping it off and redoing the whole panel).
You won’t be able to buff the exposed basecoat paint (dull spots) to a shine and have it protected-don’t try .
When we talk about orange peel, we are referring to the texture of the paint on the surface (has an ‘orange peel’ look to it- rough looking).
Hope this helps .