I am in the middle of a head gasket replacement (98 discovery) and decided to remove the oil pan to get a look at the bottom end.

All looks well. Should I put in a gasketw/ sealant or go with just the sealant?

I have seen mixed signals. I used strictly the sealant on my VW oil pan and that worked fine.

Also should I do anything with the oil pickup while it is accessible?

 

It's a personal preference. For me I used a gasket. The cork gasket I got from British Atlantic was a tad bit bigger than the pan. But onceI installed all the bolts and carefully tighten them equally, it contoured the oversize gasket to the exact shape of the pan.If you understand what I'm saying.I remember when I drop my oil pan (also a 98 like yours) I had to also drop the tie rod linkage in order to have enough clearance for the pan. If you think you can install the pan without distrubing the bead of silicone, then use the silicone. If not, then use a gasket.

 

I swung the sway bar and the tie rod out of the way so it is a straight shot onto the engine.