Definitely use the butyl tape. Putty tape is cheap and will not last. It will dry out, crack and cause a leak. It is no good for anything.
Use pure butyl tape not a putty butyl blend. It is the most expensive of the 3, but also the best choice. It is a bit more firm, but it will compress. Super sticky but that is what you want. Tighten the screws slowly and evenly, preferably when it is warmer as opposed to a cold day. The excess that oozes out can be easily trimmed and removed with a plastic putty knife. Don't use anything metal.
If it continues to squish out a bit over time, just trim it again. The butyl will remain soft and pliable for years to come, and will keep a good solid seal, unlike that cheap putty junk.