The seal gets installed with the garter spring facing in to the overdrive unit. It keeps trans fluid in the trans. The seal on the transfer case has its spring facing in to the t/fear case. You will notice a groove cast in to the bottom of the overdrive extension housing. That is a weep hole, do not plug it up with RTV. If you see a leak from it investigate where the leak is coming from by using the color of the fluid to determine the source.

I would stick with the 15 degree parts. As for fluid I would only use Mopar ATF + 4 or equivalent. The overdrive will love you for it.