Temporarily on the Hard
Join Date: Feb 2009
Location: CT, USA
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If it's teak, personally, especially on a small boat I would use either 'clear' or 'satin' urethane for a rubbed effect finish - not gloss or semi-gloss. Urethane is more durable than varnish and easier to apply. It requires fewer coats (3) to look great. The softer finish will give the interior a warmer feeling and reveal far fewer imperfections.
Trick is obviously not to destroy the veneer while removing the old finish. Depending on how thick/hard the currrent coating is, a heat gun can work wonders. Just be careful not to gouge the surface with a scraper. Otherwise, sand lightly - you don't need to strip this down to bare wood to get a good result.
If your bulkheads are formica, don't be afraid to paint them. They can turn out great. Depending on your taste, a white Herreshoff-style interior with teak trim can make a small boat feel much bigger and even more yachty.