Three things.
Yes, you seal the outside and lose the aroma but you can still smell any unfinished spots such as the bottom or outside (if you leave them that way). A light sanding of these surfaces occasionally will refresh the odor.
Second, the oils in the cedar can eventually disolve some finishes. I've had Deft spray on laquer turn gummy after about a year. If it does this, just clean it off with alcohol and refinish with eurythane.
Third, keep it out of direct sunlight and/or use some spar varnish or UV resistant eurythane on it and it will keep it's color longer. I've got a couple of pieces that are 5 years old and still have a nice, deep, reddish glow, though they lose the pink and purple tones over time.
A final suggestion. Cedar is a very strong irritant so make sure you've got good dust protection such as a respirator and an air filter. Good way to give yourself nosebleeds and a nice cough.
Dietrich