Yup.. Every rehab we do, one of my first jobs before the wife starts painting is to hit all the walls with drywall mud and cover over the scratches and holes. It's just part of the prep. If you do it correctly, you don't even need to sand it.
On another note, I also do the same with the all the hardwood trims. I find a stain that will match as close as possible and go through each room covering the scratches. It makes a huge difference as far as eye appeal.
Another thing to remember is to clean that portion of the wall/baseboard first. Clean it free of debris and dirt. Then spackle it and paint it. If you want a more "professional" look, sand it down and you wont even know where the hole/ imperfection was before.
I've been spackling for about 20 years now (yes, started at about 12) and just started using a new product by DAP called Fast 'N Final. It's a very lightweight spackle that looks kinda marshmallowy (no, don't taste it). I'm never buying standard spackling again. This stuff has no shrinkage as it dries (insert shrinkage joke here). It doesn't make any cracks when it dries. It dries fast and if you use a drywall taping knife to apply it and flatten the surface smooth - you don't need to sand it. Paints just fine too.
Tim, Im going to try out that fast and final tomorrow. I picked up a painting job on a 3/2, that has some holes. Haven't painted in a year or two, but the price is ridiculous, so I'm taking it.