There are 2 coolant temp sensors: there is a 2-wire one back near the firerwall on the driver's side that feeds info to the EEC-IV. There is a one-wire one just above and to the left of the tstat that drives the dashboard gage. They are totally independant (silly? yes... but computers were just starting to get big in cars when the SHOs rolled out in the late 80's).
If you are going to work out cooling gremlins and are serious here is the full service I recommend:
1. Drain coolant from radiator.
2. Remove and rinse out the overflow bottle as lots of crud settles there - REINSTALL
3. Pull lower rad hose and drain the engine a bit more - REINSTALL
4. Pull the tstat.
5. reinstall the tstat housing *without* the tstat.
6. Pull the upper rad hose from the rad.
7. put garden hose into upper rad hose, duct tape in place and flush the crap out of the engine (engine not running)
8. when done, pull the lower rad hose again to drain water, REINSTALL
9. Pull tstat housing, then replace the 1-wire coolant temp sensor next to it, reinstall tstat (carefull torquing those nuts - easy to snap)
10. reconnect upper rad hose, fill with pre-mixed coolant or however you prefer to do it (It is almost better to look up the coolant capacity and then start filling straight antifreeze until you hit the right amount for your ratio since there is already some pure water in the system, then finish filling with water)
Couple other points -
- make sure the fan is actually running. It will run if you turn the AC on, so put it on max and verify.
- Make sure the rad is fairly clean of crud. Doesn't hurt to back flush the rad by blow it out from inside the engine bay.
- This is not exactly an accurate temp gage. It will probably change after you change the 1-wire sensor
-In any case if you do this, your cooling system will be good to go for quite a while.
HTH