I have a 4 1/2" high speed grinder. What grit (40, 80, 120) sanding disc should I purchase to sand off the gel coat and other fiberglass?
In my experience, 80 grit paper on a sanding disk will take it down nicely. However, I would not use a high speed grinder. This will remove the material much too quickly and it will be difficult to control what you're doing. I use a variable speed electric drill and go very slowly (probably between 2 and 10 revolutions per second).
Does the interior fiberglass need to be sanded or cut down before applying the new resin or just cleaned?
Any existing glass should be scuffed up using coarse sand paper and then cleaned using acetone prior to laminating.
Can the resin be applied with a cheap paint brush or do I need to purchase a roller?
Personal preference really. I almost always use the cheapest brushes they sell at Home Depot. Just watch out for bristles ending up in your work.
Will the gelcoat stick to the epoxy resin or do I need to paint the area with an acrylic epoxy?
Gelcoat will not bond well to epoxy. You can use epoxy for the repair, but if you do, you'll have to paint. You'd actually be better off using polyester or vinylester resin for the repair since that's what the boat is made from, that way you're maintaining like materials throughout the boat.