Is there a homemade, environmentally safe recipe for coating or sealing the outside of a woodstove once I’ve removed the rust with steel wool?
I don't know of a homemade recipe for a stove coating, but standard stove polish is an option for coating stoves. The popular brands claim to be water-based and non-toxic. I have used them and haven't noticed a smell when applied or when the stove is fired. The big advantage of stove polish is that it can be applied easily any time the stove is cold. The disadvantages, compared to paint are that it produces a sort of transparent finish and rubs off if you touch the stove. Even if you buff the stove after application, it might still smudge. Stove polish works best on cast iron rather than steel stoves. You can find stove polish at most hardware stores.
— John Gulland, The Wood Heat Organization Inc., www.woodheat.org