I would use the copper head gasket because you have both but I doubt in the street situation, it probably doesn't make much difference. Back in the stone age when I was racing my MG Midget, the competition head gasket was a requirement - the street gasket was worthless. The competition gasket, as I remember, was copper around something like asbestos (this was in the mid '70s). Your copper gasket, however it's made will be better than the street gasket, but then the street gasket is perfectly appropriate for a street engine. As I say, since you already have both, use the best. As for gasket treatment, I used to use a Permatex red spray gasket treatment. It seemed to work fine but I really don't have enough experience to quantify how good it was. I would say that, first, everybody has their favorite stuff. Second, Wilkins' book was written quite a while ago but that doesn't mean that his suggestions should be ignored - they are perfectly acceptable. Third, I would consider a more recent suggestion of a more recent product if the suggestor is reliable. I wouldn't sweat it. Permatex is a good brand. I would use either a Permatex product or the wellseal stuff, but somebody with recent successful experience is well worth listening to.
Marking TDC on your water pump pulley should be pretty straight forward. The keyway on the crank should point up at TDC. I haven't built a TC motor but I think the more important thing is to pay attention to the orientation of the flywheel since that's where you'll set your ignition timing.
The Right Stuff is, from what I've heard, is actually THE RIGHT STUFF. Also good on you for noticing that you needed a little casting relief.
As I said, I've never built a TC motor. I understand that all the sealing surfaces around the timing chest are a problem. Timing the cams requires some care and knowledge, and building OHC motors are a little more complicated than a rocker arm motor too. I might ask your machinist to see what he says. I'm sure he'd want to do it, but he should be honest enough to tell you if you're over your skis. Maybe you could work a deal where you build it and he checks it. The workshop manual seems pretty detailed. If you understand all that, you should be able to build it yourself, but having a guy check your work (especially since it's your first time building that sort of motor) is very valuable.
Hopefully, someone who knows more than I will chime in.
Good luck and let us know what happened!