Its just a suggestion, but unless you can guarantee that the wood never gets wet, leaving it lightly coated so that it can breath is the best bet. Otherwise it'll wick in moisture through screw holes, through the bottom when there are spills.. and if the wood is so tightly sealed it will never dry out and will rot very quickly if that moisture stays sealed in.
It makes sense to seal exposed edges that might get frequently wet like a top rim, but I would leave other sides lightly coated.
It also aids in any possible leaks. A light breathable coating will let a leak manifest right where its coming from and can dry out quickly, so you can identify the leak quickly and it won't ruin the whole tank.