Temp unit (Pontiac) should be located in the intake manifold, driver's side. If the gauge is reading 250, yes, it could be the gauge, but sounds like there are some other symptoms. You had mentioned it loads up, etc. Hard to tell whether it's due to overheating, carb adjustments, or your timing. You also mentioned earlier you hear lots of heat ticks when you shut the car off, yet you don't get anything from the overflow hose. If you can see you're getting water circulation, and you don't spew anything out of overflow, it could be the gauge.
A mechanical advance, dual point distributor doesn't serve any purpose on a stock Pontiac 455. Dual point distributors are antiquated technology, and mechanical advance distributors are rarely ever used on street cars. Vacuum advances do wonders for economy, idling, and engine temps, and running a vac advance does not impact performance at all. Do you have a stock GM distributor that you can swap in place of the Mallory unit?
