I have ground the hull down through the hundreds of layers of paint and have now hit gelcoat. I plan to take that down to bare fiberglass because the gelcoat has obviously seen better days. So what's next? Is it best to apply new gelcoat or simply paint the bare fiberglass with some sort of waterproof paint?
You're definitely demonstrating the right attitude: fix it correctly this time. Of course that means that you'll encounter a lot of work initially. If you do take all of the old gelcoat off, remember that the function of the gelcoat is twofold. It protects the inner laminations from moisture penetration, and it gives the hull a smooth finish for performance and aesthetic purposes. Once you take it down, you'll face a tough job getting the surface smooth and fair again. If that's not important to you, blast away.
Now to seal the fiberglass, we recommend that you find a top-quality coating that's manufactured to be used as a barrier coat. Yes, you can use gelcoat, but most gelcoat products are rendered in polyester resin, and that's more water permeable than an epoxy-based coating. So why not try something like Corrocoat FC 2100, which is a 100-percent solid epoxy. (That description means that you don't have to worry about shrinkage after application because there's little to no solvent added that will evaporate after you apply the product.) This stuff is available in gallon amounts for $125. Of course there are other products on the market, and part of your decision will come down to what is available in your area and what's reasonable regarding the cost.
Best of luck with your project.