You need a temperature switch, so the guage sender will not work. It could be made to work, but you'd need a fance comparitor circuit to switch on when the sensor's resistance was below a certain value. A temperature switch is much simpler. As for installation, it's usually best to install it somewhere after water leaves the block and enters the core. Some manufacturers install the sender near the thermostat housing. Others install it in the incomming tank of the radiator. Other places may work, like a cylinder head, but the fan *may* tend to run more than necessary.
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