I don't think modeling clay is toxic, but I've never tried sealing it to make it waterproof. With ceramics you'd want to stick with a non-toxic glaze (there are food grade options available) but I'm not sure if they would work on modeling clay or if there is an equivalent.
The question here is what this "oven drying modeling clay" is.
If it's really for a kitchen oven and not for a kiln, it's likely made from polymer (= plastic). These are e.g. Fimo, Sculpey (for hobby and semi-professional usage, result is a slightly soft plastic), as well as "toy clays" to be put in an oven to make it "look real" but they basically just dry out and are crumbly. Those are not food save, and any "glaze" is then just a varnish where only specific ones can be used on that polymer clay at all.
If it is, however, real clay to be fired in a kiln, then yes, food grade glaze is available and making a dish is totally safe
This is a cool fun project.
(Background of my information: I'm doing a lot of crafts and work with those materials, including such that require only a normal kitchen oven, myself.)