I use the Golden gloss gel medium as my isolation and have no problems. A touch of water in with it (going to guess about 10% as I just brush dip rather than mix it with the gloss gel). Second coat in difference direction to the first. If you're brushing flat with very very thin coats you shouldn't get too many brushstrokes. You could use a sponge if that helps? I've never had bubbles, levelling issues with the isolation layer.
Your varnish mixture sounds fine, just make sure you don't use too much water as that will cause brushmarks and striations. My Golden jar says 1 part water to 4 parts varnish - so that's 20% water max. I also varnish in odd strokes, not straight lines. I've found this helps my problems with brush marks. (my brush marks being much more of a problem since I'm matte varnishing - so it's not texture that shows, just odd lines of gloss coming through from the isolation coat) Varnish layers should be very very thin to help eliminate any texture and help levelling. Super thin. Are you varnishing twice as well? I do two varnish layers to even everything out.
Hair and dust is down to controlling your environment. I used to drape curtains low across my studio ceiling when I was varnishing - about 2 feet over the flat paintings. Once varnished I leave the room and do not disturb it for at least a couple hours.
To be honest I actually had MORE problems with bubbles, odd marks, dust and uneven application of varnish when I tried Golden's spray version.
Varnish is my nemesis.
But with practice and honing your procedure it can get better.