Well, can it, when it is in direct contact with the components and circuitry?
Yes but beware that many "bathroom" grade sealants exude acetic acid when they set which will eat into copper. This link describes different types of sealant. Use an "electronics" grade sealant to avoid this problem. Alternatively you might want to look into potting compound.
The best generic term is "Silicone Rubber".
SR is a good to excellent encapsulant that has limitations (as does everything).
It is not essential to use an electronics grade SR - these are usually dearer and may have Mil Spec ratings which are not essential.
For electronics and anything liable to be corroded you MUST use "neutral cure" SR.
Do not use "acid cure" silicone rubber for electronics.
Neutral cure SRs will always say "neutral cure" or similar on the container. if they do not say this or similar they will be acid cure.
There are 2 main types of neutral cure SR (= NCSR) in common use. There are a number of other NCSRs but you will almost certainly not meet them.
Oxime cure is the cheaper and most common NCSR. It releases oximes and usually also methyl alcohol as it sets. Ventillation is needed and some people may get excema skin reactions. The oximes can corrode bare bright copper during curingh but this is usually not a major problem. Oxime cure NCSR does not bond to polycarbonate plastsic.
Alkoxy NCSR is more costly and the better grades of NCSR are alkoxy. It releases methyl alcohol as it sts. This can be 5% - 10% by volume ! so ventillation is an extremely good idea. It is good to work with - just be sensible.
ALL SRs that you meet are moisture cured !!!!!!!!!!!!!!!!!!!!
To set right through water vapor from the air must penetrate the SR. Pentration rates vary from about 1]mm/day to 3mm/day. If you make a very very thiock blob of SR it can take many days to set in the middle. If you take two flay plates and overlap thenm and appkly SR to the overlap the air path to the overlap is d/2 where d is the smallest overlap dimension and the path is through set SR and is very thin. SO an overlap SR join may take many many many days to set. Major SR makers recommend not using vast overlap in joins.
The 600 pound gorillas of the SR market are Dow Corning, Shinetsu (Japanese) and maybe BASF (BASF are the 600 pound gorilla of ANYTHING chemical but nobody notices). There are many other brands and many are good but if it's made by DC or Shinetsu you know it's good. Not all brands are good. Some people put large amounts of filler in their SRs to the extent that it works poorly.
DC do make some cheap lower performance NCSRs but even these work well for most purposes. DC and other large makers may sell specific grades in selected markets which are not available in all countries. eg they sell "Dow Corning Neutral Plus" oxime cure NCSR in Asia.Unlike most DC SR's it has no product number and US sources do not know of its existence. It costs a few $US a tube in eg Hong Kong and works well enough.
Many people do not know the following. Others will refuse to believe it:
There are many many grades of NCSR - setting times vary from minutes to hours. Viscosity varies from very pourable to thixotropic.
If you ask specific SR questions not covered here I may be able to answer them.
Yes, you can use many materials that aren't conductive or corrosive. Silicone has a slightly higher relative permittivity than air (3.6), but I don't expect this will cause problems, except maybe slight offsets at very high frequencies.
Note that sealing will thermally isolate your product, so it might operate at a higher temperature. Be sure to allow for sufficient cooling for power devices.