Vent to outside in gas hot water heater closet, can I seal it?
Your gas water heater needs air to burn the gas. Without the vent, there's a possibility of air being sucked in through the flue instead, which could fill your house with carbon monoxide. So yes, you need the vent.

The exterior vent should have a flap/door on it that closes when there is no need for additional combustion air. If yours doesn't, then get it replaced with one that does.