Question - sanding/finishing with marine spar varnish

[Dick]

Just started finishing the sides of our benroy. Using Pratt and Lambert Vitralite spar varnish (as someone suggested) - anyway put the first coat on yesterday. Question - is it okay to use a random orbit sander with a 220 grit pad to sand after each coat or would it be best to use a sanding block with the 220 grit?
I thinned the first coat with about 25% mineral spirits and it produced a nice finish. However when I openned the varnish can this morning it was already skimmed over and I had to screen it prior to using - is this usual?
I'm only a week into the build and hope to fasten the sides Monday and then start on the roof spars, interior roof panels, etc.
Thanks in advance for the advice.