You guys scare me with your unbridled use of rtv !!! Personally I wound NEVER in a million years use that crap anywhere near a fuel or oil fitting. You are just begging for trouble if the fitting ever needs to come apart. You will have bits of that crap everywhere you don't want it.

I this particular case, pipe sealant is the only type of sealant that should be used. It will stay soft and if the part ever needs to come apart the sealant can be wiped off. There is no hardened sealant bits to get anywhere it doesn't belong.

As far as how tight to do those washers ... tight enough that they won't come loose !! There is a groove cut on the back of the pickup fitting to contain the o-rings. Tighten the nuts till the pickup is tight against the pan - the o-rings aren't going anywhere !!