Cecil, yes, the water will seek the same level.
I've used this stuff to combat rust and it's worked pretty well. If the directions aren't followed, all bets are off. I've done it both ways and following the directions definately give you a better result long term.
http://www.por15.com/ I was 99 percent sure about the water seeking it's own level, but always working in uncharted waters makes me still want to ask.
As far as the rust treatment it looks like the same stuff I have. BTW the only real gaskets I'm seeing for toilet flanges are the beeswax ones and I don't want to use them. I've got some sheet rubber around that will make my own out of. I may use RTV rubber with it instead of silicone. For some reason I'm not having the best of luck with silicone adhering to the metal for a long period of time.
