The whole idea is to prevent oil from the crankcase from migrating across the 'seat' of the rear main and it's cap.
The rear main seal is for the crank but the 'very' thin bead along the back edge of the almost completely flush surface areas were the cap meets the block is what they are talking about.
If you gob on too much on the seat you will alter the cap's ID and cause too much clearance for that rear main bearing.
Just put a little dab of silicone or locktite on you finger and wipe it across the rear edge of the cap's (very clean ... use alcohol) seat ... no more than 1/16" wide.
That should 'smoosh' out and seal the seam without altering the cap to crank clearance...
I got a lot of tips on 258 pan gaskets and chose this very sucessful method ...
Use 3M Weather Seal (AKA: Gorilla Snot) on the rubber end gaskets and brush on Permatex Aviation gasket goop on the block's pan seat area and let it dry a little ... then place the cork on the sides.
Next put a 360* bead of the 3M 'snot' ... paying particular care to gob at the gasket junctions.
Set the pan on and use only a nut driver (the handle style), carefully settle the pan down.
Then, carefully snug down the bolts from the middle of the block to the seams en a very even fashion...
The trick is to squish the side cork a little without causing it to move out of positon... it doesn't take much pressure ...
Then, after a hundred miles or so, had tighten the bolts again ... once more being careful not to over do it ... you shouldn't have any leaks.
The trick in this is that the Aviation Permatex is thin but tacky - to keep the gasket in place and perfect for the smooth seat on the block and the cork.
The pan's seat is very irregular and hence, use the rubbery, oil impervious 'snot' for this seal.
Hey, It worked for me ... and others - or I wouldn't be passing this tip along ...
Good luck ... mine has well over 500 miles so far on my home rebuild and I've not seen even one tiny drop or smudge of oil yet ... better 'n factory ...