You can easily check the ground between sender and block without a big dance
Install the sender. Get a meter and learn to set it up for "low ohms" scale. If you post the model/ photo of the meter, we can help with that
Stab one probe HARD into the brass on the temp sender shell
Stab the other probe into a good ground point on the block. Make sure to stab through paint, chrome, rust, etc, and it should show "close to" zero ohms.
If it shows say, .2--.5 ohms, this is likely probe/ lead resistance. Mash the probes together HARD to see what the meter reads that way.
I have NEVER had trouble with either tape or sealant, but I can see how rusty threads in the block might be trouble.
IT IS ALSO POSSIBLE by overtightening to warp and damage the internals of the sender. You can also test it "in the block." Measure resistance from the sender terminal to the block, cold. Warm up the engine and measure again. This will be subjective as you have no way to calibrate it. But here are sender resistances for cold, middle, and hot:
View attachment 1715232317
ALSO do not dismiss the idea that you might have a poor connection inside the temp sender connector.........either loose, corroded at the stud connection, or "broken" inside at the wire connection.
