That might work, but then again, it might leak at the seams of the linoleum. You have to be 100% sure that the silicone is covering the entire surface if you do it that way. For my frog/toad tank, I covered the inside surfaces of the pressboard I used (what I had on hand to experiment with), and it is still doing fine. The best way is to use 2 part epoxy paint for potable water tanks. Just paint the entire inside with how ever many coats it is that you need (don't remember off the top of my head how many it is), and it makes it entirely waterproof. It is the epoxy paint that they use on the inside of water towers that hold drinking water reserves, so it is completely safe. There are a few colors that are safe and the steps to do it on this page:
GARF'S REEF AQUARIUM CONSTRUCTION - 140 GALLON AQUARIUM, as you can see from that page, they also use it for reef aquariums.
I may decide to go with the epoxy paint myself now that I am working and can better afford it, but if not, I have been planning to line the bottom of the inside with plexiglass, making the entire bottom up to the top of the plexi waterproof. Then, in order to protect the rest of the wood from the high humidity that the CWD needs (that's what I'm building for too, my project is just on hold for the time being), I am going to have polystyrene foam, GS foam, and silicone covering the entire inside surface of the wood. I'm toying with the idea of priming the wood with original Kilz before putting the plexi in and adding the foam and whatnot, but I'm not sure yet. I'm not 100% sure of the safety of using it, even though it will be entirely covered by foam and silicone and will not come in contact with the water table. Anyway! You can also cover the entire inside of the tank with plexi (even the thin stuff is going to start getting expensive with the dimensions you are going to need). Probably the easiest, most cost effective way is covering the inside with the epoxy paint. There is actually a build thread where someone used the epoxy paint for her CWD tank, here's a link:
LOOK!! Custom CWD Build Alost Complete:. You can check her member gallery to see pics of the tank.
Hope this helps!