Water Cooling help

The 'normal' orientation would see the res the other way up,
The bottom as return pipe and the side port as the pump feed,
The port at the top is then free for filling/bleeding duties,
You want to avoid turbulence as much as possible to avoid air bubbles getting into to tubing,
The O-ring is fine as long as its tight, I have a couple of fittings that don't have recesses for the seal so the get squished, no leaks here
:-)
You can check the W/c sticky for more tips though, top of the section
Moto

Guessing the bottom photo is mounted on your pump? Also, much of the setup/orientation of these reservoirs depends on your loop plan and how and where you want water to enter and exit the reservoir. Also make sure that you plug any unused ports...otherwise, you'll have an indoor PC sprinkler system.