I don’t use anything in that gap. I just make sure that the rear of the hood sits firmly on the cowl seal.
I have worked on hoods which had a horrible dent line all the way across the hood above where that material goes. Probably from not having the back of the hood firmly down against the cowl seal, subsequently causing a continuous hammering effect from the vibrating hood hitting the material in that gap.
Early to late ‘60s car trunk lids and hoods suffered this same fate as material between the sheet metal and the support metal underneath shrunk with age. You can actually see the exact X pattern of the lower support metal on the top of the hood/trunk.
