I am not sure who you talked to, or which store you were in but this is not true. Just to make sure you understand you will want to mount the UTH on the outside, under the tank. This will prevent any electrical shock when things get moist inside the tank.
The cypress is a good choice, it can be misted and kept damp without it molding. Don't keep it soggy or they will get belly rot. You will see it get light tan when it drys out.