yes you need to drop the exhaust, whether you drop the whole thing or undo the downpipe from manifold is upto you, i guess it depends on the condition of the connections - mani to downpipe i have snapped loads of times particularly if they never been off...
I can't comment on that sealant, always use loctite 5980 myself... But i put a bead all the way round the sump itself (doing a little ring round the bolt holes), then leave it for 5-10 mins to start to go off, this stops every little bit just squishing out when you bolt it on. Then when i bolt it on i don't do it right up straight away - just so the sealant starts squishing out all the way round and then i leave it again for 20mins or so and then go back and torque it all up properly and then leave it to go off properly before you fill oil.
All that said, if you follow the instructions on the sealant you can't go too wrong lol.