transmission fluid low reading

Without year make model and engine size I can't give you the exact procedure. But on most all transmissions with a dipstick, the transmission fluid levels should be checked with the vehicle warmed up to operating temperature, then add as needed. You should have info on this in your owners manual. If it is indeed low, you may have to address a leak. If there are spots of transmission fluid on the floor under the vehicle or an inspection reveals leakage, it will need addressed. Transmission fluid does not evaporate. It gets too low from leakage.

Yes , it is normal for oil level on dip stick to be higher when the engine is off. When the engine on ,the transmission fills the torque converter/fluid couplings . Any transmission I have had since my 1941 Hydromatic required the oil level to be checked with the engine running . What does your owner manual say ? Presumably you have a leak - leak stop products are more likely to cause damage than fix the leak.