Rottenstone is good for polishing out the final coat, but doesn't leave much "tooth" for between coats. If you do use rottenstone, or pumice, between coats use water, not oil to lubricate, then get clean and let dry before the next coat.
Lots of the oil finishes don't actually need to be knocked back between coats (or after the first if you've sanded and de-whiskered right). You just don't want them sitting too long before getting the next coat on. Depends on what finish you're using, temperature, humidity, and airflow where you're doing the finish as how long to wait. You want it past the tacky stage, but not hard enough to sand. I go anywhere between an hour and about 4 hours between coats.
