1) The head gasket will be marked 'top' on the side which faces up so install it that way and all should be well.
2) You don't need to worry about sealing it, that's what the gasket is for.
3) I wouldn't worry too much about a standard 998 head cracking, they have quite substantial castings and small valves so they don't crack easily. Most of the problems with cracked heads come from 12g940 heads with oversized valves. Quite frankly, with the price of 998 heads you could pick up a usable one for less that the cost of a crack test. When you install the head you don't need to worry about sealing it, that's what the gasket it for, just make sure you torque down the head carefully, following the order shown in Haynes.
If I were you I would also check what has caused the head gasket to blow. Make sure you give the cooling system a good flush through with clean water and refill it with the correct coolant when it goes back together, as that will help prevent any overheating which could cause it to go again. I would also check your timing if possible as if the timing is over advanced, you could cause detonation which might also cause it to go again (as well as potentially damaging pistons amongst other things). It might also be worthwhile to clean and re lap the valves while the head is off: you only need a drill mounted wire brush, a valve lapping stick and paste, and a valve spring compressor. Its a pretty easy job providing you're carefull and will help ensure your engine runs as smoothly as possible (I once had a 998 exhaust valve which had a 3mm deep deposit of combustion residue on the valve face which kept it from shutting properly. Although the engine ran ok like this, it was much smoother after a nice clean out and a re lapping.)
