Congrats on your purchase, gotta love the Prelude.
Clearly you know a bit about cars, so the first thing I think you should do is download a factory shop manual, goes under the name Helm. A few guys have been kind enough to upload to the internet copies of various manuals, you’ll soon recognize the names.
SpoonerTuner.com - Free downloadable Honda Acura Factory Service Manuals by HELMS .
For easier searching you can add to the contents information from
Definitive Guide To the helms Manual.
Hopefully I’m not mixing 4th and 5th gen stuff here.
Another priority would be to drain some of that oil out, certainly if it’s a lot higher than it should be.
I’ve found that those chemical treatments can be quite effective for small problems, and if they stopped the original issue they would easily stand up to a compression test. That written, I would suggest flushing out the cooling system, probably with a chemical flush. I suspect the 4th Gen are the same as the 5th in that it’s a pain because you can’t easily drain the entire system. There are some write-ups in this forum for modified techniques (basically just repeating the procedure multiple times) - as following the procedure in Helm will only replace about half the coolant.
Once it’s clean you can determine if you still have a problem or if it’s been resolved. Obviously also keep a close eye on the oil level and for contaminants.
Lastly, many Prelude issues have already been discussed on this forum (and others), so get familiar with the “search” function and do a little looking before posting questions, some of the guys here understandably have little patience with repeated questions.
Feel free to PM me if you have any specific questions. And let us know how things turn out.