anywhere there is potential sun exposure should be varnished....including the inside of the cockpit.   

i usually varnish the floor and sides of the cockpit and not the underside of the deck.  i also typically do three coats of varnish, not five.

there is, fwiw, nothing that says five coats of varnish is a requirement.  generally, the more coats, the more glass-like the finish....but i find three has served me just fine over the last 15 years.  a lot depends on use, storage, and patience for varnishing vs paddling.  i store my boats out of the sun, and do a little touch up every season and a refinish every three to four years.

but no harm if you want to do five coats.

h