Paint does indeed hide a multitude of sins. As with anything, the key is in the preparation. Fairing and smoothing the bottom is what gets rid of all the imperfections. Paint itself is too thin to fill holes, cracks and depressions.

For absolute perfection, put on a layer of fairing compound (epoxy and phenolic microballoon mix or some commercial premade stuff) and use a longboard to sand it. Once it's fair and smooth apply the paint.

Or you can decide that the fish don't care what your boat's bottom looks like, sand off the worst of the bumps, paint it and go paddling.

No varnish is needed over paint. Paint is essentially pigmented varnish.

My WD has a coating of epoxy/graphite mix to help handle the scratches from rocks, shells and concrete ramps. I transport it right side up and solar heating has never been a problem. Don't know what upside down would do. Black paint would look about the same.

Have fun,

Laszlo