In my opinion, you have not made a mistake using the water based poly.
I am a firm believer in the protective properties that oil based poly has, and have used it everywhere in all my cabinets I have built for my house and the results have been outstanding.
That said, what I know of oil based finishes as a rule, including poly, the finish is very brittle and with seasonal movement, will crack in areas, in your case where you need it most, at the interior edge at the sink and more importantly, at the meeting surface of the sink of the underside of the countertop. As a mention, the wood WILL move, and a highly flexible adhesive caulk must be used to seal the sink to the underside of the top. I do not suggest silicone, though many may swear by it. Its cleanup is atrocious. I use water based caulk in this type of place, since appearance is also important here.
Onto water based. Again, from research/reviews that I have heard from other folks, water based is a much more flexible finish and will be better suited for what you need. 4 coats is a good start. Depending on how much sanding you do between coats, I would go onto about 6, if not more. A note on OIL BASED, matte poly finishes. The more coats of finish you apply on a surface, the less matte a surface appears, and it takes on a more glossy appearance. I have seen this and limit my coats of finish to 3 coats, no more. If you have not noticed this with the water based, carry on.
About sanding wood finishes,in my opinion, 400 grit is great for in between coats. 1500G is for polishing surfaces to a near reflective finish and can be used with water, if the sandpaper is suited for it. The water clears the dust readily to keep the paper free of buildup of dust so it cuts the surface without clogging. There are grits that are more coarse, including 320G and more coarse still. I feel you will not need wet-or-dry sandpaper for this work.
The amount of sanding you do, truly needs to be watched at edges and corners. These areas are extremely easy to "burn through" all the coats of finish and in essence, still only have one coat on the surface.