yeah the heat will cause the metal to expand, but when it contracts as it cools it will probably drip again.
Fernox leak sealers and similar definately arent necessary on a fitting like that. I would just go rather thick on the tape. Whatever you put on before, double.
It wont do any harm. And on your second pic I would say that its actually went in too far lol. they normally nip up tight with threads still showing. However yours has ran all the way in. More PTFE will make it tighten earlier, but get a better seal