Ah! Varnish! One of my favorite topics! I do love a beautiful varnish job. I used to teach varnishing at Woodenboat magazine's school and for the State of Maine's Wooden Boat Building School. I learned a few things along the way.
First thing I learned is to leave the teak trim on my Islander un finished. Ha! I have a Marshall catboat I keep varnished. That satisfies both my love for varnished wood and my aversion to all the work varnishing requires.
When you prepare a wood surface for varnish it is important to make that surface as smooth / flat as possible before you start. You can use a neutral filler. I like to prep the wood with a scraper. It requires some technique to keep a good scraper sharp but it slices a thin (transparent) layer of wood from the surface and if done properly leaves it much smoother that bulldozing the grain with an abrasive.
First coat gets thinned 50% with xylene so it has an opportunity to penetrate the wood a little and provide a good bond. That doesn't build up much varnish so prior to the second coat it is important you don't sand it off entirely.
Sanding is as important as applying the varnish. If you sand off 50% o the couple of mils you applied during the last application you are taking 2 steps forward and 1? step back. Another consideration when sanding is the shape of the surface you are sanding. Outside corners, round molding, etc. gets sanded much more than flats just because of the shape. Pressure of sanding is distributed over a much smaller section of the surface.
How many coats? Applying varnish should be done 1 linear inch at a time (mentally). My head gets so close to the surface when I am varnishing that I make sure I am wearing a hat to keep my hair out of it. If you can imagine the wood's surface under a microscope its grain structure is a series of hills and valleys. The varnish fills the valleys. When you sand between coats you knock the varnish off the tops of the hills (high points of the grain). As you build up coats, the valleys get filled to the point where they are level with the tops of the hills. If you look at the surface after you have sanded between coats you will see "glossies". These are glossy patches, think microscope again, that are the un filled valleys. Keep applying coats and lightly sanding between coats, until you have eliminated all the "glossies". Now you can start counting the coats. You can see why it is important to start with a surface that is as flat as possible. A cut surface.
Once you have eliminated all the glossies 5 good coats of varnish will give you a beautiful finish.
Like any "paint job" as soon as it is done it starts to deteriorate. Varnish, being pigment free, is vulnerable to UV. The UV cures the varnish to the point where the cohesive forces in the molecular bonds of the varnish film start to tear the film apart. The way mud cracks when it dries. This begins at the surface and will go all the way to the substrate if it isn't "healed". If it makes it to the underlying wood, moisture penetrates these micro cracks and your varnish "dies". If you live in a southern climate with high UV it might require a light top coat mid season to fill these cracks. A properly maintained varnish surface will last for years. You need a paid crew to keep it looking Bristol. Horizontal surfaces are more vulnerable than vertical ones. Paint your horizontal wood surfaces and only varnish the vertical ones. You still have beautiful varnish.
Counting the number of coats you apply doesn't mean anything if that is all you are paying attention to.
This year I am removing and redoing the varnish on my catboat. A heat gun and a scraper. The boats trim is oak not teak. When I replaced the rub rails 20 years ago, I neglected to seal the back of the wood properly. I will take off the rails. I did cove them on their back side when I built them. I will fill the cove with Dolphinite and re attach them. This lazy oversight has created a situation that allows moisture to enter the back of this wood and "kill the varnish". 5 coats done this way will be "plastic smooth". I use Captains 1015.
My teak will get cleaned and left to weather.