I did the exact same thing about 20 years ago. Yes, there were a zillion nail holes. I think that you want to fill those holes if only for cosmetic reasons. The paint and primer won’t hide them. I used a latex caulk….not a good choice. It remained rubberry and the next time I went to scrape the siding most of it pulled out of the holes. The second time around I used Elmers latex wood putty and that has held up well over the years.
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