As stated, rounded side up, then I use an socket extension and a hammer to flatten them. Dont overdo it, a couple smacks should do. If you are worried, sealer can be used. I have used 3M 847, since it is what I mainly use.
Is this for a carb or powerhead? Some guys use their wives clear nailpolish on the carb plugs as you cannot see it.
rounded up. Shouldn't need any goop but won't hurt anything.
Don't use any kind of goop before installing them. Too much danger of it getting inside. If you want to put some on the outside, that's up to you, but it is not needed if the plug is installed correctly. When you set it, only go to the flat stage. If you go beyond flat, it loosens up again.