Ach - thats nothing....
Any Mylar that is on the edge of this etc needs to be removed. Wipe the bare wood down really well with meths to remove any grease and allow to dry.
You now have to fill the area to bring the level up - builders bog can be used here - apply it with a small spatula or even cut down credit card. Allow this to dry and very carefully sand it back with some sand paper folded over the tip of your finger.
Once this is done and wiped back to remove ALL dust, apply clear contact vinyl over the area and cut away with a sharp scalpel the area that now needs to be painted. Now you will need to prime - i always water my primer back so it penetrates the PF instead of just sitting on top of it. Once this is dry spray on the red and remove clear contact.
You should now have a very neat area that only needs the black detail to be added.....simple enough!! can use a fine marker for this.
Now - protecting the work, no need to CC such a small area - go to the hardware store and buy some polyurathane gloss finish, while you are there buy the additive that goes with it - this makes standard P/thane VERY tough. If you havent got an airbrush then a SABLE paintbrush will do the job - make sure its a smal sable brush, not nylon - these give brush marks. Cover your work with thin layers of this, applying another layer every couple of hours.
I did the kickouts on my Lost World with exactly this method. I didnt restore to perfect, i wanted it to look as though it had seen a few games already. When i got the game - all the paint was missing behind the kickout where the ball would slam into this area This was restored some 5 years ago now and has had 100's of games on it.
It still looks the same today as it did when back then - no wear at all...take a look
For pics of the clear contact sheet and priming etc see this post id did..
http://aussiepinball.com/index.php?topic=114.0