I’m a big proponent of fiberglass for plywood tanks. The mail reason for including it is that epoxy can ultimately become a bit brittle over time, which can create a risk of cracks if there is a little bit of flex, particularly in the corners. If you never move the tank and add sufficient corner bracing you certainly minimize this risk, but adding a fillet and some fiberglass tape in the corners (if done correctly) is an easy way to add extra security.
Fiberglass also adds impact resistance. If you accidentally drop a rock onto a piece of epoxied plywood there’s a risk that you’ll crack the epoxy covering. The fiberglass layer again provides a little extra security against this.
So overall, I’m sure you can get away without it, but for me personally if I’m going to take the risk of having several hundred gallons of water sitting around my house in a wooden box I’d prefer to take steps to minimize any risk of a leak.
In terms of how, you might want to check out some of my past build threads for details:
After months of researching, planning, designing and redesigning I'm finally ready to start this project. It's going to be pretty different from most of builds on here in a couple of ways. For one thing, it's going to hold a lot less water than some of the builds, so I shouldn't have to deal...
www.monsterfishkeepers.com
www.dendroboard.com
I much prefer fiberglass cloth to fiberglass mat, and I prefer to lay it with clear epoxy resin rather than fiberglass resin. First add a light base layer of epoxy and let it mostly cure until you have just a little bit of tack on the surface of the plywood - this will help hold the cloth in place and also help to prevent bubbles from the wood drinking up too much epoxy.
Next, carefully spread your cloth on the surface and make sure it’s smooth with no folds or creases. Then mix and pour your epoxy into the center of the cloth and use a plastic squeegee to spread it out, working from the center outwards and pushing any bubbles away and out from the edges. You want to make sure you use sufficient epoxy and apply the right amount of pressure to make sure there are no bubble under the cloth - the fiberglass should be completely clear when you’re done. After it mostly cures, add additional coats of epoxy to completely fill the weave of the cloth for a nice smooth surface. Rather than dealing with really big pieces of cloth, I sometimes find it easier to work in sections (e.g., one piece of cloth for each side, and a bridging strip for each corner). Wait till one piece is mostly cured before moving on to the next, and overlap your pieces of cloth by an inch or two. Flip the tank as you go so the side you’re working on is on the bottom.
I’d recommend practicing on some scrap wood first. It does take a little practice to get the technique down well, but once you do it’s pretty fun (at least I think so, but maybe that’s just the fumes talking!) Which reminds me - make sure you work in a well ventilated space, and wear gloves and a long-sleeved shirt.