the only seals that are external to the gearbox are the extension housing seal, the torque converter seal and the manual valve seal, - which one is leaking? - mind you only the extension housing seal is replaceable with gearbox in the car.
Or is your mechanic talking about the sump gasket?
You can use Dexron III rated oil or Dexron VI too - dex VI is a bit better blended - its a semi synthetic blend, it remains fluid at much lower temperature than dex III and has better bite for the clutch packs (quicker shifts).
The only issue with Dex III today is that its name owner General Motors has dropped its blending licensing globally, meaning whatever oil is being sold as DIII is actually not true DIII but an oil that closely mimics the original formulation.
Some blending companies are still using the old formulation like mobil but some have changed it a bit to lower its cost.