I picked up butyl tape to seal the frame but was also recommended to run sealant around the window frame
Ya, you could do it that way and hope that is your problem. Or you could watch several youtubes on the subject.
I recommend pulling the hole thing out and look for where the water is actually coming from the best you can anyways. Could be leaking from above the window and your just seeing where the water leaked onto the window from above. If you pull the window I like using
http://www.kasonind.com/index.php/products/fabrication_supplies/7513_tacky_tape/ tacky tape brand, see brand name inside of tube? That stuff works. Doesn't dry out in 3 or 5 years. That is why rv manufactures use the cheap stuff. Gets them over warranty period at half the cost. Stays like bubble gum for many, many years depending on how much sun it gets. Bending tape around corners is easy. As your putting tape onto the window frame just mash it with your thumb and it follow where you mash it, around corners. After you get the window and compression ring back in, Scrape of excess tape and In about 3 months after the compression ring does it thing more butyl tape will ooze out a little, maybe a 1/4 inch worth. Scrape that little bit off (I like to use a popsicle stick)Then put a little dab of sealant on top and sides.
When you get window frame out, mash your finger nail into your old tape. Is it dry or cracked or just a lousy job of install? If dry or brittle maybe it is time to re-caulk all windows. Already have new tape on hand in order to compare new tape with old. If I've missed anything PM me.
Hope this helps