Either can be used. It's the joinery that matters. A completely mitered box on the exposed sides is what matters. The bottom of the box does not have to be mitered.
Butt joints will telegraph through the finish. In other words you will end up seeing the joint movement.
Sealing on the interior and the exterior of the box is most important. Then your choice of lacquer and the number of coats. Under a dozen total coats ( sealer coats should be around three, and top coat a minimum of three or four coats ) is ok, lots of coats end up cracking. The real trick is knowing how to sand properly to get a dead flat surface.
as was already said, the key to a good paint job is to get the surface perfect before applying coat 1 of paint. less important is the wood used. one technique to help ease the process is the use off high build primer. this will help fill in all the hairlines, pinholes, grain effects, etc.