Good morning, Bruce. Do the gauges in your car have an oil temp gauge? If so, you could somewhat calibrate it by using a candy thermometer down the dipstick hole and that will give you an idea where "warm", "hot" and "oh my God! hot" are. And the same if you throw in a VDO oil temp gauge; they don't always read accurately from cold to hot.
Where to put the sender- now that's a subject of great debate (look it up on the Samba, you'll be amazed!). Wherever you put it (in the block, in the full flow line before the filter or???), don't just rely on the gauge; use your powers of observation as well. An engine with a shroud, cylinder covers or dipstick that's too hot to touch is hot! If a couple drops of water (or spit) sizzle on the engine case, that tells you it's really hot as well.
Buy a good temperature compensated cylinder head temp gauge; Dakota Digital has a good one and there are others. The VDO aftermarket unit is not temp compensated, will read different temps depending on the weather and will be as much as 40' low when the engine is at operating temps. Underneath #3 spark plug will let you see what's happening in real time. Any where else isn't close enough to the combustion chamber to be instantaneous and will only measure trends. A lot of VW factory heads have a cht boss already cast in and people are sometimes tempted to use it, but all it was designed to tell the fuel injection brain is when the engine is warmed up.
If the firewall has a 6" hole, maybe oval it out to the sides a little bit- 3" will give you another 18 or so sq." of air intake. Increasing the diameter 1" (I think) is a good idea as well. The shroud's intake hole is about 6" and you'd think the same in the firewall would be enough, but there's the air going into the carburetors to consider as well. And with more than enough air into the engine compartment, the airflow out of the grille at highway speeds will be removing heat radiated from the shroud and cylinder covers, and this will make for cooler air temps into the fan and carbs (and this means there's less heat for the fan to remove and cooler intake air for the carbs; see where this is going?). Hope this helps. Al