First coat of varnish has gone on the deck of my Shearwater 16 hybrid-and it looks mighty fine to me!

Just how much of a sand do you need between coats for 'tooth' assuming no obvious drips/snags/dead flies?

I have some 240 and 320 grit paper, also some 1200 grit wet and dry. i am loathe to create too much dust if I can avoid it, although I can work outside if the weather remains good. I don't have any 'scotchbrite' pads as I have seen suggested.

I am thinking first time maybe use the 320 paper then move to the finer wet n dry for the last coat or so?

Attached pic is before sanding the deck for the final time