Love Temperature Controller Question...

I picked up a Love TS-2 for my little fermentation chamber and I have a couple of questions about hooking it up.

1. I want to hook the switching function up to the Normally Open side right?

2. I've seen some post on here about putting the temperature probe in some ice pack gel to keep the temp a little more stable so as to prevent the compressor from turning on and off as frequently. The probe that came with mine doesn't look like it is sealed at all. does it need to be sealed some how before I put it in the gel? If so what can I use to seal it up?

I don't know about the ice pack gel, but you're exactly right for the compressor switch. Here's my build from a couple weeks ago:
https://www.homebrewtalk.com/f51/my-kega-fermerator-build-123889/#post1380927

I had hot going to terminal 7 and the line to the compressor wired to terminal 8.