Proper way to attach tapered, threaded connections?
See this thread about how much to tape to wrap.  Two wraps might be too little while 20 seems pretty extreme.

Some people like tape, some like compound and some like both.  I gave up on reading about which is better because it just seems to be a matter of opinion.

Both are for lubricating and sealing.  The "Pipe Dope" has a substance in it (sometimes hemp) that expands with moisture to further help prevent leaks.

Regarding how tight, you can definitely over tighten but if they are leaking I wouldn't hesitate to give another bit of a turn.  You need to be particularly careful with compression fittings since they can be more easily over-tightened.