Not sure what your question is above?
There's a bunch of choices for a sealer/thread locker, one that's good for pipe threads and resistant to oil is Loctite 565:
There are others sealants/lockers,, someone else might have their favorite.
For the torque spec, there are tables and calculators for the size of the bolt (length of engagement, width, threads, etc), steel into steel, steel into aluminum, type of aluminum, etc etc, but you don't need clamping force for that pipe plug, so with a thread sealer/locker best guess is snug, get it back to where it started (original level/depth)??
It would help to know if the plug/hole is tapered (hard to tell from the photos). If it's tapered it will snug up and not want to go much
deeper than how you found it.
Others will chime in.
Important IME to completely remove all traces of oil from the threads of the hole and the plug using Acetone but not just one quick spray from a can. For threaded holes I use pipe/tube brass brushes ie: in, spin around, spray, clean the brush, repeat, repeat, etc. That might sound OCD but IME if you want something like that to stay sealed and tight you need to be a bit anal about cleaning the threads before applying the sealant/locker (see the Technical Data Sheet below):