Yes Yes And Yes. Todays fuel sucks with its ethanol additive. I move fuel in bulk for a living and it plays hell on every gasket and packing a ship has. You could replace that ring that swells with a VITON one IF you can locate one or keep the tank full enough to be above the ring at all times or as you already said do the external holly thing. If its a standard o ring size order a viton replacement as viton wont swell with alky
Drawback is viton is harder therefore might not seal as well.