The wax helps protect the stain, and also helps keep the skull (particularly the teeth) from drying out. Until I got into doing this stuff, I thought bone was completely stable. Kept out of strong heat and direct sunlight, it is very stable, but not perfectly.
I put on enough to cover the surface well (mostly by hand but I have old toothbrushes and some shaver-cleaning brushes for hard to reach areas), let it sit for a while, and then buff it with a cotton rag. On porous bone (or wood, etc.) I hand-rub briskly to heat the wax and drive it into the pores (or use a hair dryer, carefully) and may repeat the coating and rubbing several times.