Thanks for the replies.
I'm thinking either R&R the caulk or scrape what I can off the existing and varnish over.
Sanding down to the caulk is not gonna happen. A belt sander would work, but WAY too much sanding would be required.
The teak isn't that bad, the grey scrubs off quickly so a cleaning/bleaching and minimal sanding with >180 is all I'm planning.
Yes, it is getting Varnish. Step on it afterwards? You are off the boat!