Actually, what you've got there is normal, especially where the cut is running close to parallel to the fibers of the cloth and squeegee'ing pulls the fibers away at the edge. Just fill the weave of the intact cloth -- don't worry about trying to cover over those strands with epoxy. Later on you'll just sand those strands off when you feather the edges of the cloth. When you do sand, you'll notice that the strands will appear white, as will any of the rest of the cloth you accidentally sand down into. (If you sand down into the weave, you'll see the waffle pattern start to show up -- stop sanding in that area and move on...) The epoxy will be a light amber. Don't worry when you see the white partly-sanded-through cloth start to appear as you sand. When the varnish wets everything out again, it'll all magically disappear.

When doing your fill coats, I'd suggest squeegee'ing each of the coats. I didn't do this on my 2 kayaks and it resulted in more sanding than I really enjoyed. When you add fill coats, the epoxy builds up layers, but tends to keep the wavy surface of the cloth -- it 'telegraphs' the weave of the cloth through each layer. At the end you sand down the high points so that the surface is smooth. If you squeegee the fill coats, you'll fill in only the low spots to start with, and you'll be applying less epoxy and won't need to do as much sanding.

Dean