What to put on these threads?

What I posted about teflon tape is more of a personal preference. Most manufacturers of fuel oil pumps - commercial and domestic heating - say do not use teflon, fuel oil breaks it down, can ruin the pump, etc. So I avoid it professionally.
National pipe thread is tapered, and it is good practice to keep any sealant a half to full thread back from the end. In reality, once you install a water fitting in an intake, you'll likely never need to remove it again. Teflon is fine.