"What's a good product to use on removing silicone?"
What is called "mechanical abrasion", scrape, chisel, or sand it away. There's an aerosol paint stripper called KleanStrip that will loosen most of it, but that's extremely strong stuff, read and follow the warnings if you use it.
"Next I plan on picking up some prep stuff to remove the silicone (as mentioned earlier) " There's a big difference between silicone rubber, and the silicone POLISHES that the prep compounds will remove. They remove waxes and polishes, they will not remove silicon sealer.
Real gel coat only hardens in the absence of oxygen, which is why it is normally sprayed inside a highly polished female mold and then covered with the other FRP materials. If you want to apply it over a male mold (the canoe) you'll need to cover with with something else like a PVA spray or it won't cure properly. Gel coat is also sensitive to thickness and the odds are it will CRACK badly as the canoe hull flexes under it. I've never heard of it being used on canoes.
"After the fiberglass is in there I'll attempt to feather it out and blend it to as level as possible without comprimising strength.
Does that sound like a good process/approach or am I missing something?"
What you're missing is that unless you follow the steps from an experienced materials supplier, you're going to have a very expensive mess on your hands. There's usually a reason for every material and process they suggest, and you can't just substitute for them. Fiberglass work is very much a matter of experience and patience, if you haven't worked with the materials and you take shortcuts, the result is going to be poor at best. West System aren't the only folks in the business, but they are a good place to start, they document the entire process and you can download most of it online FREE.