temps above 125 degrees celcius will wreak havoc on your engine, the head and block can come loose blowing out your headgasket, the oil will break down to tar. Usually the temp gauge and sensor is made in such a way that the red zone means its overheating - its nearing 115 to 120 degrees. the middle is about 90 to 100 degrees. To make sure everything is in spec - run your engine with hood open for about 1 hour and see when the fan cuts in and cuts out. If the temps are maintained properly you have nothing to worry about.
I would also look at the fan relay for fatigue as you have been running it direct for over a year or so. I would also see if the fan blades seem bent out of shape - they should be straight and even till the edges, if they are bent or seem wavy - you need a new fan blade.
If I were you - I would look up the factory resistance readings on the temp gauge sender - then go buy a resistor of the same value and test the gauge with that resistor to see where it shows that resistance, that way you know for sure that what temp your meter is denoting - maybe someone can help on this forum with the resistance readings - try the khybers owners club, they have a service manual too