I've never used Waterlox so I won't comment about that.

About the deep cut marks--you might consider removing the counter & turning it over, putting the marred side down. Another thing you could do is to find a wood shop that has a wide thickness planer, wide enough to pass the block thru.

And, whatever treatment you decide on, I would finish all sides, edges & ends of the block before I reinstalled it. This is a really important step for preserving wood because finished surfaces and raw surfaces absorb & lose moisture at different rates. This difference will, over time, contribute to the failure of the glued joints and also lead to checking & splitting of the wood itself. Also, for that reason, it isn't a 'best' practice to put hot pans directly on the counter. 'Occasionally' isn't going to be a big problem but, over the long haul, it's just best to develop good habits that minimize subjecting the wood to extremes.

I did use Waterlox on mine. The people at Waterlox are very, very helpful, so I recommend emailing them with anything you're uncertain about. The page I've linked below says that you should wipe it down with mineral spirits or lacquer thinner if it's previously had mineral oil on it. It also says, "Waterlox Original tung oil products can be used around stoves it is unaffected by boiling water/liquids up to 220 degree. However, always use a potholder under cooking utensils and hot pans/pots."

Here is a link that might be useful: Info page about Waterlox on counters