Temp Too Low???

I've been super happy with my 318 powered Valiant, never had any serious problems with the engine since the swap. I've always prided myself on how cool it runs, about 160-170 under any conditions but Seattle traffic. I've got the gauge installed to read from the top of the water pump, its a mechanical gauge that uses pressurized gas (I think) to read the temperature. I was just talking to my dad the other day, and he said that running that cold can actually be bad for the engine, causing buildup and such. My question is that is that temperature actually unhealthy, and is that location for the gauge to pull temp from accurate to the rest of the engine? Running a brand new aluminum radiator, so it seems fairly reasonable for it to be running a little cold. If it is too cold what do I do to heat up the engine (short of cardboard over the rad)? I don't know what temp thermostat is in there, but would maybe a 160 degree unit help?