Good to hear you are on your way, if you are going to use a gasket sealant, use it on both sides of the gasket, cylinder and crankcase. The head gasket is embossed for better sealing, I am not sure which way it goes, i don't know if it matters, but I put the gasket so the inside angle is down, maybe Hoolander can help with this one.
Once you get the first circlip in, push the wrist pin in as far as it will go, making sure it goes through the wrist pin bearing, this should leave the remaining groove clear to install the remaining circlip. before you put the wrist pin bearing in, lubricate it with 2 stroke oil. long nose pliers will help to install the circlips. The circlip abuts the wrist pin.
Yes I believe the side with the writing or numbers stamped on the ring goes upper most. The 39 would be the bore size, 39mm.
Put the first circlip in with the piston out of the engine, when installing the second one, make sure you cover the opening to the crankcase to prevent it from falling in there if you drop it, this can happen easier than you might realise.
Good luck, now you can enjoy putting it all back together, knowing it is almost a new engine.
If you are not certain your oil pump is working properly, you can put 75-100mls. of 2 stroke oil in your fuel tank to guarantee lubrication of your cylinder until you can get the pump proven to be working.