Looking pretty good. I like to see people step out of their comfort zone and just go for it.
As far as your instructor, I may be off, but he sounds like a jerk. Almost like he just shows up for the pay check.
I have been in the automotive refinishing business painting/prepping cars for almost 10 years now and seems to me like theres not enough base coat on the car. I don't know what type of paint or what system you are using but you shouldn't be able to see through the color to the sealer/primer underneath. Also the 400 grit is acceptable depending on the process used. Same as in detailing, the type of sanding process used will yield different results with the "same" grit. 400 grit on a random orbital sander (DA) is going to be finer then if you hand sand wet or dry. Sealer is more then likely going to be required if you only prepped the car out into 400 grit with a DA. Some painters will skip the sealer step if they know the primer was prepped well enough (finer grit). The sealer basically fills the minor scratches helping to create a smoother finish for the base coat (color) and makes the entire car one uniform color to start your painting process. Not having the car prepped to a fine enough grit sand scratch is definitely one reason why may see the cross hatched sanding marks under your base still.
And I'm sure you have realized this now but anything that is under the clear cannot be "buffed" afterwards. your base should look exactly how you want it to be when its finished only it will be dull. No dirt, fisheyes, runs, sags, scratches or any other imperfections. The fish eyes are a small spot or some times large areas with many small spots. They are small craters that have some form of contamination on the surface that won't let the paint onto it. If the fish eye is in the clear its pretty much like having a hole in your clear coat that goes straight to the contamination and can be a pain to fix and possibly require a repaint. The contamination could have come from anywhere. You mentioned water in the air lines, the guy in the picture painting is not wearing any sort of paint suit to protect the paint job from gunk. I also worry about the health of the guy painting because the chemicals are nothing to mess around with and proper precautions should like paint suits and respirators should always be warn. The chemicals can and will kill you given enough time and exposer.
Well that ended up longer then I thought it was going be. But seriously it looks good, especially for the first time. The first time I painted it was like a horror movie plastered to the side of car.
Jeremy