I have been fairly well educated on the temperature quirks of the 1st gen. First of all, the factory gauges are not necessarily junk. It is fully agreed that some aftermarket gauges, depending upon quality/cost, are probably a bit more accurate as far as displaying exact readings, but an error of plus or minus a few degrees is not going to destroy your engine. If you are going to leave the truck in stock condition, the factory gauge is fine, and anywhere in the operating-range is fine (assuming the gauge and sending unit are working properly).
BTW: I have a '92 Dodge/Cummins, A-518 auto w/od, K&N filter, and a 4" straight exhaust. It has new (stock) injectors, a recent valve adjust, and the pump has been turned up some. That's all.
From the very first time I pulled the mountain going to Boone NC on Hwy 421 (gross-weight about 13,000 lbs.), I have had a "heat issue". It took me a long time to figure out that it's mostly in the way you drive. In other words, the driver was the main problem. Black Mountain (on I-40) was another warm one, but never as bad as Hwy 421 to Boone.
During my "learning curve" I have sent my complete gauge pod to Southern Electronics for speedometer repair, and gauge calibration. The gauges were within tolerance. I have replaced two fan clutches, had the radiator cleaned, and the list goes on. One particular trip up the Hwy 421 mountain, I borrowed a mechanic-friend's infrared heat detector. The gauge pegged that trip. I pulled over at the top, check the temperature at the outlet and it was 260 degrees (not boiling over). That time it really did worry me.
When I got back home and reported the results to my mechanic he immediately put me in touch with a man (in his 70s) who has specialized in diesel engines most of his life. His first two key questions were: how fast was you going, and what gear was you in. I told him I was in drive (overdrive locked out) and was barely holding 50 mph. His reply was: "what in heaven's name were you trying to do?" "Those older engines weren't designed to be run that way" He told me to drop back to about 40-45 mph, drop down a gear, and back off the throttle. He also told me to look for a "sweet-spot" where the truck felt like it was pulling good. He said it would actually be making more power than if I was holding it to the floor. The next trip, I took his advice. That "sweet-spot" was easy to find, the truck pulled great, and the heat problem went away.
I am NOT saying these old trucks can't be beefed-up. I know they can, but if you are happy with a basically stock truck (I am) you don't need all those expensive accessories. Drive your truck and enjoy it.
This has been my experience, it's not hear-say. Sorry for writing a book!