The issue is primarily one of appearances. A couple of coats of paint, or primer and paint, even on bare canvas, will keep water from coming through. Using a high-build primer will give a smoother surface and so a somewhat better look. Since you have bare canvas showing, I think I would at least spot prime those areas after sanding
If this is intended to last only one season, I would think epoxy paint is overkill -- a good gloss oil paint (marine enamel, porch and deck paint, or the like) would look as good as the epoxy and would do as good a job in keeping out water -- and would probably be significantly less costly. If, however, you may end up relying on the paint job for a number of years, the cost issue becomes less significant, and if the canvas is obviously very worn and weak, epoxy paint might add a little bit of strength and durability.
The decision-making here is really in the realm of personal taste and preference. Almost any good paint or filler/paint will serve the utilitarian need of making the canoe usable for a season or two. Extra sanding, extra filling, extra good paint will add little in the way of functionality, but may be worth it to satisfy your aesthetic sensibility.
Keep in mind that, except for the owner/paddler, it is rare for a canoe to be viewed from any closer than 10 or 20 feet away. It is surprising what can't be seen, and how good even crummy, crackly paint can look, from 20 feet away. And people usually look at the canoe -- not at the paint. For example, most people looking at the last picture above of your canoe will see a very nice little canoe, not a worn, chipped paint job.
Using my 15' OT 50 pounder as an example, the first two photos are close-up views of the condition of the paint/canvas when I bought the canoe. This is probably how you are viewing your canoe right now, with the defects painfully plain and ugly. But step back just a few feet, and it's a pretty nice canoe, even with all its flaws (especially if there is something like a cute dog to distract the eye). The next two pictures are after some very minimal hand sanding (not my favorite sport), filling a couple of deep gouges with epoxy, and just two coats of a good semi-gloss porch and deck paint over the original paint -- one photo from less than 10 feet away, and the other from maybe 15 feet away. You just don't see the cracks. And the final photo still has only two coats of new paint, but also the added distraction of a design I tried out with some paint my daughter had left over from an art project.
The canoe needs recovering -- which will be done in a couple of years when I get time to repair the couple of cracked ribs and planks. In the meantime, the quick paint job is more than satisfactory for my purposes -- getting out and paddling now, in a canoe that doesn't leak and looks ok.
I would add that the semi-gloss paint tends to hide defects a bit better than high gloss paint, but is not as easy to keep clean, especially with the very light color that I used.