#2 can be removed easily with denatured alcohol and should produce no problem getting the fitting out. Is the clocking advancing the thread clockwise? If so, you can just continue tightening, without removal. If you are going counter-clockwise, the same really applies. Once you have tightened an NPT thread to a specific point, you can't go backwards or it will leak. If you can't get another 3/4 turn, for example, you may have to try a different fitting. Removal and re-application of #2 acts as a lubricant and will help with further tightening. Sealant isn't really required on quality NPT threads. It's primary purpose is lubrication to allow the proper torque that provides the seal. Without lubrication, most people will stop before getting the fitting tight enough. That said, I always used #2 on NPT threads.
As mentioned, you need to used whatever the cooler provides for holding with a wrench. Some are hex and others have an aluminum plate with two parallel flats.
Larry