Hey Andrew,
What about any of the two ports marked in this picture?
Both are stock locations for temperature sending units for the 1HZ. I have seen 1HZ with them in either location. Mine, personally, had the original temperature sending unit on the location marked in RED (from factory) and a plug on the location marked in YELLOW.
View attachment 1548298
I later moved the stock sending unit to the location marked in yellow on the photo above (as shown below), and added an auxiliary ISSPRO coolant sending unit and gauge, to the location in the cylinder block. My goal was to keep the engine appearance "stock" since most people will never lean down to check the aftermarket coolant temperature sending unit.
View attachment 1548300
I personally would think that the sending unit on the outlet of the engine will be the hottest point you would ever read, so if you want to make that your upper limit, then I would install the Watchdog unit there and move your stock sending unit to the block. I wouldn't drill on the radiator, if anything I would weld a bung of sorts to the radiator if watchdog recommends the sending unit on the radiator itself. Just a thought I guess