: So does anyone here use an oil or water based stain for their frames?

I don't know anyone who has stained a kayak frame, but there's no reason that you can't. However, once the boat is skinned, you won't see most of it, which is why putting a lot of effort into finishing a frame is pretty pointless.

: I am also going to be doing some work with shellac (the REAL shellac) and
: that seems like it has the potential to be good - and it's all natural,
: fwiw.

I suggest saving the shellac for furniture finishing. Shellac and water don't get along well, which is why you can get water rings on shellac-finished furniture. I can't imagine anything good happening if you use it as an SOF frame finish. If you put it on thick enough to protect the frame, it will have the same water trapping problems that varnish does.