Coolant temp sender is at the drivers side rear of engine below oil pressure switch/sender
Drawing here:
http://repairguide.autozone.com/znetrgs/repair_guide_content/en_us/images/0900c152/80/07/7d/27//small/0900c15280077d27.jpg
Because of this location temp gauge can read cooler that most engine gauges that have the temp sender at the top front of the engine, where coolant will be the hottest.
And can take a while to show full warm up.
Temp sender is a 12volt device(not to be confused with the ECT sensor, a 5volt device, used by computer only)
I think Ford still uses old OHM range but not sure
80 ohms or higher is cold, under 120deg
center of gauge is 25 ohms, 200deg, normal operating temp 1980 and up
Hot is 10 ohms, 250deg
1991 heater hoses should not have a shut off valve like 1995 and up did
So there should just be 1 hose from upper front of engine to heater core, and 1 hose from water pump to heater core
Heater core has no "direction", and you should actually REVERSE the hoses at the firewall every year or two, to reverse the flow thru the core, this will make it last longer.
On the 2.3l there may be "T" with a smaller hose that runs to the intake manifold, this is for cold weather operation, prevents icing
You could move the temp sender to a heater hose, this would make it more responsive
You need a heater hose bung like this:
https://static.summitracing.com/global/images/prod/large/atm-2280_w.jpg
And new sender, or use the old one and plug that hole
Bung MUST BE grounded, thats what the black wire is for
Then extend the sender wire to the new location