That is always the general advice given, but in particular MG John has done a couple of HG replacements on cars which had little or no liner stand proud and used the original type MLS and shim, but didn't seem to have any subsequent problems with those engines. I used the six layer gasket on my ZR six years and nearly 50k miles ago, and the liner stand proud was less than 2 thou - it had only done 39k on the original SLS gasket. The coolant has been changed completely after five years, but has needed absolutely no topping up otherwise, and so far, no other head gasket issues appear to have developed.
So the sealant, I just have to use it between the new oil rail and the engine block to which I'm going to screw it?
Use it on the new oil rail (the areas to apply it are shown in both the Haynes manual and on RAVE), and also use it to seal the sump when you refit it.
John suggestion of Loctite 574 is a good one, although when I was doing my head gasket a while ago, the smallest size of Loctite 574 that I could find was way more than I required, and more expensive than the MGR/XPart stuff. I think Rover originally sourced the cam carrier/sump sealant from Loctite, so it may well have been Loctite 574 that was used in the factory.