@CruisD64 I think the location of the aftermarket temp sensor is debatable. On the upper hose you are reading the heated water coming out of the motor after the t-stat opens....so is it "real time"?...eh, not exactly but it's consistent with what's going on inside the motor immediately as long as the t-stat is working correctly.
I would think the lower radiator hose is a bad place to locate a temp sensor. You are reading water temps AFTER they have been cooled by the radiator and before it gets to the motor, not really an indication of what's going on IN the motor. You will see consistently lower unrealistic temps here. Someone correct me if I'm wrong. (?)
Agree the best location for a sensor is inside the loop before the t-stat. But the 3FE doesn't have a great spot to locate a temp sensor on the t-stat housing or on the head somewhere...at least none that I've ever seen consistently documented here on Mud. That's why people go with the upper rad hose location.
The accuracy of the stock gauge in the dash has long been in question, but they tend to be consistent with what's going on under the hood. Mine fluctuates a good bit (and pretty darn accurately) according to conditions, I can see when the t-stat is holding, then when it opens, I can see fluctuations in the needle when I'm running the heaters, when it's cold outside, or hot, load on the motor, etc.... So aside from the gauge spike anomalies, the stock gauge can be a good indicator. The aftermarket gauge is an important check n balance against the stock gauge.
Your stock gauge readings at 1/2 to 3/4 sound normal, just watch for consistencies.