Use the green wire, that is it. Ignore or remove the yellow one from the connector.

I just used rubber fuel line from the stock lines coming from the firewall/frame to the two in/out lines on the intake.

Ya, you sure can use the stock thermo, but keep the 5.3L one in there, the pcm needs it, and forget about tapping into the wiring for the 5.3L temp gauge.
The t will work. Also, gm makes a part that replaces your 5.3L sensor, it's part number 12551708 and it has three wires instead of two,
Two of them for the pcm and the other goes to the gauge. It works on my gauge, actually it's a tad off, but get the truck up to temp then pull the needle off and make it read right, mine is wrong when the truck is cold, below 100degs, but it's right on up until 220 or so.

good luck, and post results and feel free to post questions, that's badass you're doing it.
btw, you'll need headers, hehe, i'll keep you updated on that too


allen