Node-sass is a finicky library. It tries to load a binary to the local os and often has issue. See if you can install node-sass directly on it's own and that often solves the problem.
from the root of your project.
npm install node-sass
then re-run ojet add sass after the standalone install works.
John - thank you for taking time to reply.
That didn't work for me - same error.
I did however find a note which mentioned that the version of node above requires SASS 4.12.
Running this meant it installed successfully:
npm install email@example.com --save-dev=true
When I serve my app with a theme, I now see:
Watcher: sass is ready.
Watcher: themes is ready.
So I assume the theme is applied.