Mike,
OK. I have some suggestions but you may want to take these with a very large grain of salt
There are others who do it differently.
You're not going to fly this thing so go ahead and use 1/8" for the inlay on the fuselage. This will give you more tolerance in filling and sanding.
Don't even bother with trying to cover the tail feathers. Make them out of 3/16" sheet and sand to the proper scale airfoil section.
I would use 1/16" sheet to cover the wings but you will have to cut the rib outlines down by 1/16" all around to compensate for the covering or you will get a "fat wing". You may have to inset some plastic parts, but I'll leave it to you to engineer this.
If the kit calls for any paper fillets make them of 1/32" sheet or card stock.
Now if I were doing it, after sanding everything smooth, down to the 400 grit level, I would give it a coat of a 20/80 mixture of nitrate dope and thinner. (Actually, that is what I have done in the past. Now I would use a water based polyurethane because of my wife's allergy to dope.) This will set up any loose fibers on the wood and allow you to sand really smooth. Then, I would fill any depressions with lightweight spackle and sand again. When I was satisfied that the entire surface had no bumps or depressions, I would give it another coat of dope (or poyurethane), sand, and wet cover with Esaki tissue then, put the final finish on the tissue. If you don't at least cover the fuselage with tissue, it's a lot of work to get a smooth finish that hides the infill.
However, if you must finish over bare wood, here is how I have done it. Go to an auto paint store and get a grey, lacquer based primer. (I'm assuming that this is still available. The last time I did his was 50 years ago!) This stuff has a bit of thickness to it, as a filler, and is meant to be sanded. A coat of this and you will immediately see any flaws that need to be sanded or filled, that's why they use it on cars. Take care of any problems, sand to the 600 grit level, and give it another coat. If you did it right, this coat will sand down to to the 800 grit level and almost look like glass. At this point you will have a surface that is better than most plastic models and you can use any final finishing technique you wish.
Hope this helps and does not confuse.
Howard