Thin the first coat of varnish or primer about 30 percent, using the thinner that is suggested by the maker of the particular product you are using. Don't mix and match to save a few bucks. The results of creative chemistry could spell disaster for your coating work. All successive coats should be thinned only if necessary. If at all possible, avoid varnishing or painting in direct sunlight.
Early morning is best, when the sun is low in the sky.
Late afternoon is a bad idea because the evening dew will cloud the finish. If you plan on painting gelcoat, make sure you dewax the surface thoroughly with the appropriate fiberglass solvent wash. Use clean cloths and turn them frequently during the dewax process so as to absorb any wax and not spread it around. After dewaxing, then begin the sanding process. If you decide to get lazy and just begin sanding, you'll drive any residual wax into the work surface and risk a paint job that will not properly adhere to the gelcoat.