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Can someone explain any major/ key differences I'm missing here? From my understanding, gloss is shiny, matte is flat, and varnish is the finish that you spray on models to "seal/protect" the paint. Could anyone provide information on the other two and when you might want to use them? I've seen both used at the end and in the middle of painting jobs.

'Gloss/matte' and 'varnish' are two related, but different concepts.

Gloss, satin (or semi-gloss), and matte (or flat) are finishes, which is to say they describe the specularity (shininess) of a painted figure. Paints have finishes, as do varnishes, mediums, primers, and anything else you'd apply to a model. Most GW/Vallejo/P3 paints are somewhere between matte and satin.

Varnish is a clear product which is designed to go over paint, to provide protection and/or to control the finish. Typically, varnishes are described by their base, which today is usually acrylic for brush-on/airbrush or lacquer for spray, and by the finish they produce.

You are correct in your interpretation that varnish is the spray often used to protect paint, but it also has the secondary effect of determining the finish of the model.

There is a common myth that gloss varnishes provide more protection than matte. This is technically incorrect, but a matte finish requires a lighter dusting of varnish than gloss to get the intended finish, so gloss can be applied more heavily and consequently provides a better protective coat. You can use a sequence of different products to get the desired finish.

Typically, you'd want to use satin or matte for most figures. Matte gives the most realistic appearance, but satin provides deeper color and more 'pop' thanks to its shine. Gloss is normally reserved for specific areas meant to be shiny, like gems, lenses, or water.

Here's an example of multiple different finishes together. These models have been sprayed with lacquer gloss varnish, followed by lacquer matte varnish, followed by acrylic ultra-matte varnish. This sequence produces a very durable matte finish. Lastly, I used an acrylic gloss floor finish on just the puddles on the bases to give them the shine.

Varnish can be used in the "middle" of your painting process.

This can be done for a few reasons:
-It changes the way washes behave over the surface.
-It allows for easier correction of overpaint.
-It protects the work you've already done.
-It prevents "peeling" or lifting of the previous layers of paint if you're going to use masking tape/film/fluid.

I'm sure other people may have found other uses, but those are the core ones, a gloss varnish is more visible so is often the better choice at this point.

For final "sealing" of the model it's largely down to personal preference as to where on the Matt <-----> Gloss spectrum you want to be.

As Catbarf mentioned, there's not a definitively better finish for protection.

Also consider that if you're painting for presentation or competition then any varnish or similar will change the tone of your paint to a greater or lesser degree and is worth testing on a spare before doing on a finished mini.

Rik

The matt looks more true to life but the gloss just makes the model look more spectacular (color depth). Did a stormraven and I really loved the look when I glossed it and was a bit disappointed when I sprayed matt after.

Might do the next one glossy and only cover the battle damage areas, blast marks and weathering dull (with a brush) to get best of both worlds.

I sometimes use gloss as an underlayer of varnish before I respray with matte. This gives the protection of gloss with the matte effect.