Yes use Teflon tape, remember to wrap it on counter clockwise.
Not sure about your unit but on mine I have 5 valves
3 valves at the HWT:
1-Valve for cold water in- open for summer use, closed for winterize.
1-Valve that connects cold and hot water lines-closed for summer use, open for winterize.
1-Valve for hot water out-open for summer use, closed for winterize.
(See Flybob's pic below)
2 valves at FW intake:
1-Valve close to your water pump, this valve will have an open ended hose attached, the open end goes into the antifreeze jug when you winterize.
Closed for summer use open for winterize.
1-Valve lets your FW into the system-open for summer use, closed for winterize.
You may have to look around for this but it should also be close to the water pump.
If your not sure if the valve is open or closed, the handle goes with the direction of the flow. E.g. If the handle is parallel to the pipe it is then open, perpendicular it is then closed.
One more item:
when your winterizeing do the HWT valves first then winterize. No need to fill the HWT with antifreeze.
When your de-winterizeing do the HWT valves after you de-winterized. Do not want to be putting antifreeze into the HWT. (Takes forever to get all of it out, oops
This is how mine is set up, yours may very well be different but it should be somewhat similar.
Hope this helped and not confuse