Re: how do i tell if my mercury is running correct temp.
This is a V6, right?
On your engine you have an overheat switch. When the engine overheats this grounds the overheat switch to the block and completes a circuit which SHOULD set off the alarm under your dash. Test this.
As to your question, I am not sure if you can tap into the cylinder head (preferably near combustion chamber of the 1 or 2 cylinder) and install a temp gauge. They are nice to have.
But better than a temp gauge is a water pressure gauge. This you can install. By paying attention to the water pressure at various RMPs you can quasi-monitor the engines temp. That is, if the water pressure is very low (like 1 psi) at WOT...you know you have problems and the alarm should probably sound.
Since you just purchased the engine, do you know it's maintenance history? If not, I HIGHLY recommend that you replace the waterpump and thermostats at a minimum. I'd also like to see you replace all the components of the pressure relief valve for good measure. That way you can start with a known working cooling system, and then you can get comfortable with the typical water pressure readings at various RPMs, so when an anomaly in water pressure occurs you can take appropriate action.