the gasket should be inside the tank, and the nut part should be outside...
and for your question about PVC cement, yes regular cement will work.
if you dont like the smell, and all that purple primer , there is a product called "gorilla" PVC cement, which claims to be stronger than the pipe itself... it dries white, and has a much cleaner appearance.... i just used it to plumb my 225, but i wont get to fill it to check for leaks till tomorrow...if youd like an update on my opinions of the glue when im done, id be glad to give ya a review...so far, the nicest thing ive noticed about it, is that there is no smell, and its only one step, wich makes it much more easy to use..