The wood absorbs water more readily than oil based finishes.
I believe this is due to the water molecules being smaller than the
molecules of the oil base finish and therefore the water penetrates
deeper and faster.

Either way, the wood needs sanding after the first coat of finish has
dried.  Sanding the final coat lightly gives the smoothest finish.
I will try the light cross grain sanding.  I hadn't thought of that.

Richard Griffiths