ATF is fine to use in your steering system. I have used both for years and niether one seems to be better than the other. The guys at Teleflex were then ones that told me I could use ATF with out any problems. Like I said before, ATF is just a little thicker but you wont notice it. Other than that, the big up-side to the ATF is you can get it anywhere and the price is so much better.
Look at the rod really good and check for pitting. If the rod is pitted, it is just going to leak again. You can smooth it out some with some really fine wet sand paper but it wont fix anything. It will only get you a little more time out of new set of seals.
And to answer your question, on the last boat I owned, I ran ATF in the steering for years. No problems with it.
I replaced the entire cylinder last winter. Purchased a new one off ebay for maybe $250. Seals were ~$80, shaft had small scratches in it, and I didn’t want to have to do it all again in the middle of the busy season.
shaft looks good, so I just went with the cylinder seal kit for now.
The helm seal, on the other hand, has been quite the adventure. So far I haven’t found anyone that has or can get replacement parts for Uflex helms. Uflex will not sell them to me directly (or anyone else, apparently). Several local industrial suppliers do not have them. Even though the Uflex helm uses a “standard” 3/4" tapered shaft, the seal is actually a actually a metric size, 19x26x7 mm. Found some online, should be here in day or two. If anybody has a leaking Ultraflex helm and needs one, I have 3 extra - the site had free shipping for orders over $10 so I ordered 4 rather than pay $5 shipping for one $3 part.
I’ll post results when all the seals have been replaced.