Overheat/Cooling system

[Smurfeh]

Alright, I previously had what I thought was an issue with my coolant temp being far too low. It was reading 120F however, I determined that it was actually being read in C which would put it at 235F YIKES!

I'm quite confident that I have set the cooling system up incorrectly.

My system is the Stock 84 3 row rad, clutch fan (mechanical), heater core, and engine block. That is it..

I have the 84 overflow tank in there with some fluid to just bury the hose, but it never sees any thing else. I have tested the t-stat and it functions correctly and the water pump also functions correctly.

Did some searching on the forums and my steam line is going to a nipple that is slightly below the rad cap on the Pass side. Apparently this isn't the place to do it?

My questions are:
1) Is that steam line location fine or no?
2) should I actually have a recovery tank instead of an over flow and if YES how should I plumb it in? maybe a diagram?
3) It is also possible that my clutch fan is not operating correctly as well.. It should stop spinning when I shut the engine off when at temp correct?

Thank you in advance

2007 LH6 5.3L