Keep the back of the engine sealed to the engine bay and the engine tuned up and heat shouldn't be a problem. I've been running a type 1 in my 73 for several years and heat hasn't been a problem . . . except when I had a BAD vacuum leak in the intake and tried to climb Monteagle twice. It got kind'a warm that day!
I've never used one, but the dipstick sensor would be the one I used IF I used one. Simple, easy to install, not to expensive, does a good job of warning you when you start to overheat . . . sounds like my kind of part.