Have you ever looked at any of the high end aftermarket trans pans and wondered why they include a sensor bung for your tranny gauge? Its because this is where you want to take the reading from. You dont want to see how hot your fluid is getting after going through the transmission, because it then goes through the cooler and dumps back into the pan. You want to see what the temperature of the fluid your tranny is actually going to be using. Transmission fluid can handle temperatures above 200 degrees for a little while at a time, but once you start exposing it to temps above that for extended periods, then thats when you need to worry. Hence the reason its in the trans pan.
If you dont want to buy a tranny pan, then just put it in the diagnostic port like everyone else does, it may not be 100% accurate but its very close. Thats where mines installed and ive never had a problem with it.