Clear silicone adhesive is OK. I use clear silicone adhesive that permatex makes. This stuff is great for racing engines in most cases. Builders often will get permatex or equal in a 14 oz tube for a caulk gun to assemble engines due to there frequent use. They may have got a killer deal on clear this purchase?
As for the coolant, if you just started up once you likely had a air pocket in the block that raced out when you opened the cap. That is, unless you mean that you had coolant everywhere spraying in the engine, then that is another matter. That is not unusual at all with engines running low in the front to trap air in the engine after the first start up and launch coolant out the filler neck when the water pump is off. Jack the front of your car up when you fill coolant and run the pump to perge out all the trapped air in the cooling system and always use a closed system and you will not have trouble unless your cap is not the highest point in your cooling system when the pump is running or if you do not have some kind or bleed in the radiator to remove air.
Bruce
PS. sorry I did not read your entry as well as I should have. The coolant in the oil is bad. The silicone he used may not have been good or something much worse may have happened . I hope things are not as they appear