How do you finish wood?

I finally decided to end my break from the teardrop and get back to work. I am not a woodworker so I've never had any projects worthy of finishing. I bought a gallon of Minwax Helmsman Spar Urethane to finish the inside of the tear and the galley. I'm not using any stains or dye, strictly the natural wood color.
The general understanding I have is to:
1. sand the wood smooth
2. apply finish
3. sand finish
4. repeat 2 and 3
My questions are:
What grit sandpaper do you use for steps 1 and 3?
What is the purpose of step 3, to scuff the finish for better adhesion or for smoothness?
What determines how many coats to apply?
Do you finish the insides of cabinets/drawers?
Do you sand the final coat then buff? or is it left as is?
Help, I'm too far along to screw this up.
The general understanding I have is to:
1. sand the wood smooth
2. apply finish
3. sand finish
4. repeat 2 and 3
My questions are:
What grit sandpaper do you use for steps 1 and 3?
What is the purpose of step 3, to scuff the finish for better adhesion or for smoothness?
What determines how many coats to apply?
Do you finish the insides of cabinets/drawers?
Do you sand the final coat then buff? or is it left as is?
Help, I'm too far along to screw this up.