The grease is not "lubrication". As said, it is for heat transfer.
A "flat" surface is never perfectly flat. When two flat surfaces are bolted together, they only touch on the tips of their roughness. Even if you polish with fine emery on glass, only about 1% of the metal actually touches. The other 99% is air, a lousy thermal conductor.
We fill this air-space with Thermal Grease. Classically a metal-oxide in a light grease. Use a THIN spread. While this used to be only for electronic techs, PC CPUs also use Thermal Grease, and instructions are easy to find.
Electrical insulation is different. (Grease can not be trusted.) Use whatever was there before. Mica wafers are classic. Rubber pads are also used (but usually not with grease). There are plastic films. If the original build used an insulator, then you must also!(*) Usually the original insulator may be re-used. Some go brittle (or get lost), find a replacement.
(*) Older TO-220 metal-tab power devices frequently needed added insulators. In the last decade some of these devices are available in "Insulated TO-220" packages, the metal tab embedded in epoxy, no added insulator normally needed.
