I have my "system", which is for sure same like many modelers do.
So, I sand balsa surface to be as much smooth, as it could be.
Than apply glass cloth and epoxy resin.
Next day I light sand surface, if there is some bubble I sand it down also (made hole on that spot) and than apply second resin layer.
Than I apply gray primer, which show me where I need to apply filler. That is almost on whole surface...
First sanding is with 100 grid paper. A lot of resin, filler and primer was take down after this stage.
Than again gray primer. Gray primer show small scratch, holes, waves, etc... exactly where I need again to add filler. Of course, now you don't need so many filler...
Sanding again first 100, than 240 sand paper.
After this stage a lot of area is gray and good, so you don't need to apply gray primer on whole surface. But on spaces where you apply filler or on areas which are "colorful" I add again gray filler.
After this stage, maybe you need to add on only few spots filler, but usually don't need to do that.
Last sanding is with 240 "bald" sand paper and that is it.
On this stage you try to not take down gray filler, because on next step, painting, sometime you need to add more color layers (weight) to cover that "colorful" spots. My painter told me that...
All in all, sanding is most important, and three times is minimum if you want to have smooth surface...
Sorry, little longer, but hope will help...
Mirce