Hey Street,
I like to wrap a couple of coils around a 1" deep socket for a clean looking vibration dampener. I think the washers you mentioned are the compression Ferrel's. Teflon tape
IF applied properly is OK but may I suggest Aviation #3 sealant or even a small amount of black RTV. Only apply sealant material to the last 1/2 of the threads so there is metal to metal contact if installing a electric sender so it has continuity or is grounded well. As a rule I do not use anything on brass into the block because the brass is soft enough to seal well without a sealer.
Teflon tape applied incorrectly can be a huge problem. The fittings for the
oil pressure gauge is fairly small and most folks only have 1/2" wide Teflon tape although 1/4 " wide is available. The first full thread on the fitting should not be covered with tape, it should be wrapped with 3 full revolutions and in the same direction of threads when tighten. All this is so the tape does not get into the
oil system or whatever you are working on.