Varnish is often touted as the desired finish for brightwork and wood. It will let you appreciate the grain of the wood while also allowing you to inspect the condition of the wood with a simple glance!
While varnish might be the outer most coat, it should not be the first coat applied. When wood is harvested, it is wet from the tree that was once living. As it dries, it will warp and check. If you make something out of wet wood, it will soon develop cracks as it checks and dries. To avoid this, wood is "seasoned" where by it is dried slowly and in a controlled manner. This makes sure that the wood dries out evenly and doesn't develop any of those nasty checks or warps.
So, the wood you work with for your project will be nice and dry, ready for you to shape into the desired form. Since the wood is dry, if you varnish it, the wood will soak up all the varnish and need more coats.
Putting on many coats of varnish is not a problem, and it will be desired to create a very durable finish, but you don't want to start off with varnish.
At the heart of your wooden creation is dry wood. Any liquid you put on it will soak into the wood as the wood is desperate to re-hydrate itself. If water ever gets into the wood, it will begin to rot the wood from the inside and lead to an early death of your creation.
Varnish, while a wonderful top coat, is rather viscous and won't penetrate deep into the wood, meaning that deep in your creation will remain dryness. Water will, as always, find its way into this area and begin to degrade your creation.
Instead of starting out with varnish, you should consider using oil first. Linseed oil to be precise, is a wonderful oil to treat wood with as it will flow deep into the wood and satisfy the woods craving for moisture. As you begin oiling the wood, you will see the end grain literally suctioning the oil into the wood like a series of straws. It is very important to soak the end grain with as much oil as it wants until it stops drinking it up.
If you want to really saturate your wooden creation, consider submerging the wood in oil and letting the oil flow into it over several days.
You can see how the wood is actually drawing the oil up above the level of the liquid in the bucket. This is happening through the entire piece and over a few days will eventually pass through the entire creation.
After the wood has been well oiled, it should be allowed to dry for several days to a week in a dry area. Once the wood feels dry to the touch, it can then be varnished. The varnish won't soak into the wood quite as much as it would if the wood were dry because the oil has already been taken up. With several coats of varnish, a strong and durable layer will form on the outside that will glow with beauty!
The best part is, if the wood gets wet, the oil will repel water from getting inside, so the wood will not rot as easily. This isn't an excuse to use rot prone woods on the exterior of a boat, but it is a way of prolonging the lifespan of a wooden creation on the exterior of a boat.