Just throwing this out there. Just because you ground the wire for the sending unit and the meter pegs, it doesn't mean that the gauge is accurate. If it were me, I would check the ACTUAL engine temp at the sending unit with an infrared gauge. If you find that the actual engine temp is 120 degrees, then you know it’s a cooling issue. If you find that the actual engine temp is 143 (or 160, I don’t know that engine) then you know you have a gauge or wiring issue. A dirty or corroded wire connection could throw the gauge off.
“You realize your odds of winning the lottery are the same as being mauled by a polar bear and a regular bear in the same day”….E-Trade Baby.