After the Hom Dai, his body is buried in Hamunaptra, which is itself sunken into the desert.
In exchange for sex, he got Velasquez an apartment and paid for her cosmetic surgery.
Bernhard invited Velasquez to her hotel, and the two hooked up.
Sure, it lets him know if someone touched his mistress, but she could just as easily smear the paint if she bumped into a wall or decided to lie down for a nap.
Visually, it's a nice piece of shorthand to let the audience in on the moment without over-explaining it, but any adult in the room who's ever put on makeup or body paint or even a Halloween costume has to be wondering why that's the look Pharaoh settled on.