Update:
We removed the T-stat valve but did not made the fan direct. Given the heat, the fan would have to blow in any case, since the AC would be turned on.
Drove the vehicle for like 5-6 km and saw the red light again.
So finally, I can say, that we have explored every other option except the head gasket so now I am sure head gasket need to be changed.
My driver is a seasoned mechanic. He had years of experience at that. For example he has been working at Auto Club I-10 for 2-3 years too. He worked on the engine of our old khyber and is neat in his work. Working at home has the advantage that one can work at one's leisure, can be focused, can ensure that the best parts be used, no juggars are used, etc.
I am thinking of doing this project at home.
Or a neighbor's basement can be used who have turned it into a full private car garage/workshop. So one can leave engine open without issue too, if needed.
How would the expert with experience of this City model comment?
Now when the engine is to be opened for over-heating treatment, what MUST be done, what to be checked, and what not touched.
Since the car drives fine despite this overheating, I believe, there wont be any engine head warping issue?
Also please recommend authentic information on honda engine build up, any DIY guide would be helpful.