To answer your first two questions (glad you figured out the aluminium tubes!) -
1. Yes, you can certainly use varnish on your kit but if you want to seal the wood before sanding then proper sanding sealer is probably better. But check the reply to number 2....
2. You can apply the epoxy to both inside and outside - indeed, there are many who would say this is desirable to seal the wood properly. The epoxy will probaly be fine as it is (it is intended to be a bit thicker than varnish) but if you want you can thin it slightly, either with proper epoxy thinners or a little methylated spirit. But - if you are going to seal the wood with epoxy, don't use sanding sealer or varnish first. The epoxy will seal the wood best if it can soak in, and you can varnish over the epoxy to give a shiny finish.
Enjoy your build!
Greg