You may be able to remove this plug and put your water temp sender there. I would be surprised if it comes out, most likely you will break the plug as it will be rusted in place with as old as those motors look. My motor is a Gen V and I couldn't get the plug out.

I rebuilt my 420's 3 years ago. Both water pumps were junk and I hated all the clutter on the engines. I bought crossovers from SM. It really cleaned them up and one less pump to go bad. I relocated the senders on the front of the intake manifolds like everyone suggested. Plugs came out of the stock aluminum intakes easily, maybe not so easy on a cast intake. One sender for the gauge, the other for the alarm. I have had no problems with the crossovers.
As for the oil temp,imo, unless the engines are out, i'd use the plug at the remote filter. Maybe not the most accurate reading, but better than no reading. I'm not sure, but I think Merc used that spot on their older engines for oil temp.
Good luck, BC

If your motors are out - why not put the oil temp sender in the oil pan maybe where the oil drain plug is located.

Also I heard but never seen one as of yet that there is a small oil temp sender or probe that can attach to your motor oil dip stick. IMO that would be too easy then would'nt it.

Anyone now where the oil temp wire would be hidden in the harness?

Secondly, my alarm system never has worked...anyon have a pic of what the contraption behind the gauges looks like?

You'll need to do some poking around for the alarm. Some of the alarms looked like mini bells, some were like black plastic round things. Should have a tan with blue striped wire going to it. Find your sensor on the engine with same wire, run a jumper to ground. Turn the key on position. Alarm should buzz. Make sure you have power going to the alarm also. If it buzzes while sensor is grounded, sensor switch on engine may be bad. My guess is the alarm is not hooked up under dash though

There isn't one. You have to run your own sender wire.

on my Gen VI 502, i put my oil temp in the previous oil pressure location. (above filter boss\Pad) that was eddie young's suggestion to me as well. this way you see the oil temp AFTER the cooler.

for my oil pressure gauge, i used the port on the bell housing. there was already a sender there for the oil pressure alarm so i just put a T in it and ran my gauge from there as well.

This is where i put my water temp sender . I used a Keith Eikert thermo housing . The sender used to be in the intake but the temp probe was shrouded because the sender was screwed into a reducer first . This way the entire probe is in the water flow . If you look by the power steering pump you will see the brown/blue stripe alarm wire . I don't use it as i always monitor my gauges .

deep,that is a goog looking engine,nice job.