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Not always, it can be used after the hones. In your case since you are not honing you can use it when the edge starts to degrade a bit to bring it back to full potential.

I personally do not use wool veru often, but it depends how your edge is, for example fresh of the hones if the edhe is good you probably will not need to use wool, just fabric and leahter.
If the...

Usually the felt is used for applying some sort of spray , diamond or CrO , or used as is for stropping before you would go to leather.
If you apply spray to the Wool Felt, then the sequence would...