Bronica EC-TL focus screen seal

The foam seal around the screen holder frame is crumbling and would like to know if I can just remove it and replace it with a dense foam cut to size? Am I correct in assuming it's just there to put a little even downward pressure on the screen or is it critical for focus?

That is correct, any foam that will hold the screen down against the spring pushing the Fresnel lens up underneath will do.