1995 Ford T-Bird LX 4.6

Any Help appreciated:
1) water pump replacement , that o-ring seal is that it? no gasket sealer no gasket just that o-ring eh? doesn't feel right without hours of scrapping 15 year old gasket material off block.
2) OD light will not go out, shifting is kinda jerky at times, feels like tranny rebuild looming or should i mess with filter and oil change first, i hear mixed on this one, that doing a tranny oil ad filter change can speed up the rebuild process so why bother?
NOTE: i picked up car cheap 600 bucks, i have done oil changes and new brakes and meat all the way around that is really it.
4) work to be done, water pump & cooling system overhaul (arizona heavy AC use car), front suspension very squeeky, tranny work, then hopefully on to performance mod, I am a man  and I have occasional primal needs to be able to do one of those angry boyfriend burn out of your driveway self administered stress relief therapy seesions etc...
 
thanks brothers!

o ring should be all u need for water pump on od light and rough shifting u didn't say anything about speedometer if its fluctuating check rear end my 94 f-350 was acting up like that and the rear end was in pretty bad shape had to replace hope this helps