hi there
Another topic which is open to many answers and basically the correct way is YOUR WAY OF DOING STUFF and YOUR materials.
As you can see you may have a variety of answers, however, in this case you have to take a couple of things into consideration. First of all, the plywood which the model is made from (the framework and so forth) what type of plywood is it? As good quality birch ply is pretty water resistant and may just take a couple of coats of paint to make it fully waterproof. If you are using a soft aircraft type of ply (such as lite ply) which is like a balsa infill and absorbs water rapidly; you have to use something in the form of an epoxy resin, or, a coating which is really 100% water repellant.
On the market, there are several makes of epoxy resins. I personally tend to stick to Zpoxy finishing resin without anything added such as a thickener etc. and apply 2 - 3 coats of this on the hull and this resin remains clear when it has hardened. There are also resins from Deluxe which are made for the modeller and are basically water based - these are quite easy to work with.
Here is a pic of the Bluebird which I built a couple of years ago which is made from liteply and this will give you some indication of the finish which is achievable. Bluebird has 3 - 4 coatings internally of the Deluxe resin and 3 coats of Zpoxy on the exterior.
John