You need to blend it in like you said. if you just mask a square, you'll end up with a raised square when you take the tape off. sand about 8 inches round your repair with 1500 before you spray, then it will blend in when you wetsand it all and polish up.
make sure you use a very high build primer after your filler, if you're just using rattle cans then go to halfords and get the filler primer with the yellow lid. it's pretty good stuff but needs to be put on in very light coats or it cracks, and needs to be block sanded afterwards. block sanding is very important in all sanding stages or it'll look lumpy