Does anyone know what caused this? I would like to know what to expect before I try to sand or cut it out to repair it. Thanks
Somebody applied plaster to the wall (probably when fixing holes) and didn't do a good job of smoothing it. The waves were caused by the putty knife moving back and forth when it was being passed over the plaster; maybe due to a shaking hand, maybe lumps in the plaster. Getting a smooth finish on a wall is harder than it looks, and if someone's in a hurry, they might not bother.
If the wall feels solid, there's no need to cut anything out. Sand it (preferably with a sanding screen) to knock down the high spots. That will probably be enough to make it flat, but if there are any depressions, fill them with plaster and smooth with a wide putty knife. Then prime and paint.
Or just hang a picture over it.