I haven't tried water seal.
Fiberglass does add weight to the blades and in my experience, is much harder to rebalance them.
If I go back to wooden blades, I would use a good quailty primer and sealer, then quality oil based paint in several layers. The final step, use copper sheeting on the leading edges. That will save you from repainting them four fold. Leading edge tape is also available from several aircraft sites on the net. Aircraft Spruce comes to mind.