I use Shell XLF. You can find it at most Walmart's, and it's a proven oil for the "Iron Cyl" engines. There are a lot of performance outboard guys who recommend it also.
Yes... just ad it to the tank in the boat. BUT... when you have that cap off... make sure the o-ring is good. The system works with air pressure, and if you have a leaky cap... you can starve the engine.