I'll tell you how I approached each of these, you can decide from there...
Q; Am I better using fiberglass cloth (fabric looking stuff) or the more loosely woven fiberglass cloth?
A; I used fiberglass matt as opposed to weave, on the back of the panels. I bought some weave, but have never bothered using it yet.
Q; With small cracks, should I use epoxy instead of fiberglass resin?
A; Although some may disagree, I figured that if a crack formed, it will keep forming if I don't repair the substrate. I usually find these around the edges of the fender and the edges of the window openings. I ground off a little fiberglass from behind the crack giving an overlap of about 1" to either side of the crack, then painted the underside with resin and layered on fiberglass matt that was well soaked building it back up to original thickness. I always tamp the matt down with a stiff brush soaked in resin to lessen the chances of voids.
Q; In areas where the gel coat is cracked, but it just on the surface, should I put a fiberglass patch on the back side of it for reinforcment, or just bondo it and move on?
A; I tried just using bondo and found that the crack kept showing up. Then again, I tended to sand it down to an extremely thin layer of bondo. After that I used my die grinder with a sanding disc to clean out the cracked area, then used bondo. Much better. Here's the question though. Why did the glazing crack? In some cases, I think it was from too much outside pressure from people working on the car, or pushing the car and flexing the fiberglass. In those locations I added a little fiberglass matt backing. I didn't find any voids under the cracked glazing, so I have to assume that's why it cracked.
On really coarse areas of surface damage, back with fiberglass matt (a few layers overlapping wider and wider), and use long strand fiberglass body filler on the outside surface, finishing with bondo. I've never had to use spot and glaze putty yet for these repairs.
Don't be afraid of using up the sand paper when finishing. Buy a large selection of grades of paper and go through them from coarsest to finest. (Anything finer than 320 is pretty much wasted since the primer and paint seem to fill that in easily) The first time I used 80 grit for roughing out the shape I thought I'd have a heck of a time getting the trenches out of the surface... I was pleasantly surprised at how easily these were removed with each finer grade. Next time I'm at the store I'm going to look for grits coarser that 80 for the roughing out phase.
Good luck,
Mike