Bondo autobody filler putty works to make a smooth surface, but since it has no reinforcement, it is brittle. With only foam behind it, you either need a really thick layer or a random accidental bash will make it crack and start to crumble. It's also a little too thick when applying it and quick to set up, making it hard to spread evenly over a large surface. The result is a lot of sanding. Followed by another round of putty once you uncover all the little air bubbles that you just sanded down to. It's also nasty stuff that shouldn't be used in significant quantities indoors.
If you want to save a bit of drying time at the cost of more money, you can leave out all the parts about paperclay and spread bondo over the paper mache. Spatula on a thin layer (~1/16''). It sets about 10 minutes after mixing, and then you can sand. It's easy to sand at first and grows harder over the next 24 hours or so.
You should not use Bondo directly on top of styrofoam as the monomers eat away at the foam, creating a weak-spot beneath. You need something to act as a barrier. This can be paper mache or acrylic paint or gesso, just as long as the bondo and the foam don't directly touch.