I didnt use any sealer on my old 316i M40 and that didnt leak at all.
I never use any sealer on gaskets unless recommended by the manufacturer.
As for the thread a good engineering works or garage should be able to fit a helicoil to it without removing the head, this involves carefully drilling out the hole then re-threading it with a special tap then fitting the helicoil insert.
Not a big job, maybe 45 mins.
Dont leave it though as it may well leak if you cannot tighten it, and dont be so heavy handed next time
Cheers,
Iain T