Varnish does not hide blemishes but can actually accentuate them. If you have sanded into the cloth, it will still show through varnish and it will most likely show through extra epoxy unless you go through a sanding process using finer and finer grits of wet-sanding paper and water, cleaning up between grits. You have to keep at it until the cloth impression does not show when wet with water. Then you can apply more epoxy then get on to varnishing. The other alternative is to just ignore it, go paddling and try to remember to fix that spot when the boat needs to be re-varnished.