I really shouldn't try to give others advice after a long and boisterous Halloween night.
Especially going from memory, as I don't have a film back handy.
I think that seal is necessary, though light leaks are still unlikely IMO without it. I don't think that's the cause of the leak-it looks to me like the dark slide slot is the cause of the streaks. The other seals I was talking about are inside the grooves on the back of the insert where the edges of the rear (hinged) half of the film back close over it. There is also a necessary seal made of felt on the bottom of the film back next to the hinge, which lasts longer than foam.
That deteriorated seal is foam, which has broken down from age. It causes that inky, sticky mess that I should have recognized as being from the seal, having dealt with it numerous times myself. It was widely used by manufacturers. Jon Goodman's kit contains a wooden tool to scrape it out, and then you need a little lighter fluid (naptha) and a lintless cloth to get it all off. Alcohol works, but I like lighter fluid. Using either on the rollers will ensure you got it all. I guess a paper towel would work as a cloth; just check for fibers afterward. Jon's kit cost me I think $10 a few years ago, and it contains all the seals needed for one back, and instructions. His kits are very high quality.
I have not used the kit from Aki-Asahi, but they have a good reputation for their camera leatherette replacement kits.