It's no use polishing it — there are too many fine scratches and dents on the surface.
Literal
Surface [to-に] fine scratches [and-や] dents [subject-が] many exist [because-から] polishing [even-ても] useless [emphasis-よ].
磨いてもむだだよ uses ても ('even if') + むだ ('useless') — 'even if you polish it, it's pointless.' から gives the reason. The yo at the end asserts this as a fact the listener should accept.