Yes, you need CIRCULATING coolant to get acutate temp
You can install something like this on a heater hose:
https://www.raceplumbing.net/assets/images/product/ATM2282.jpg
Or like this on Rad hose:
https://www.raceplumbing.net/assets/images/product/ATM2283.jpg
Rad hose temp sender only reads temp of coolant flowing to or from radiator, which is good for e-fans but not so much for dash gauges
Heater hose warms up with the engine so a better choice for a gauge sender.
Remember sender needs to be GROUNDED to work, and rubber hoses are not good grounds, lol, which is why these usually have a ground screw
You also mount these so sender is side ways or down, incase there is air in the system, sender can't read air temp well
Which is another reasons "T" doesn't work well, if its at a high point it WILL get air inside and it can't get out