Yes, some parts of the engine are hot enough to melt the insulation, at which point the metallic center can come in contact with the engine, short out and result in a fire.
A wire can also rub against the engine long enough that the insulation wears off, THEN when the metallic center comes in contact with the engine, you'll still get that electrical fire.
It sounds like your temperature sender (on top of the engine) is faulty allowing it to earth out, or the wire going to the sender may be touching a earth.
because the fan cools the engine...
because your thermostat is opening and closing as the engine temp. fluctuates
Because the gauge is broken.
Check engine light : Gauge cluster without tachometer ( under the engine oil pressure gauge ) Gauge cluster with tachometer ( just to the left of the battery voltage gauge )
The engine is overheating. The check engine light is not on because you have no problem with the emissions system which this light monitors.
A boost gauge in an internal combustion engine has the role of a pressure gauge. The gauge indicates the manifold's air pressure or a turbocharger or supercharger's boost pressure.
because the engine in that car does not cool down
A battery gauge "moves up and down" while running because of fluctuations in the voltage output of the circuit which it is connected to. This may be because of equipment on the circuit.
You can check the temp. gauge operation by removing the temp. gauge sending unit plug and touching it to any engine ground with ignition on but the Van not running. The gauge will go to hot right away, if it is working. The temp. gauge sending unit is located on the drivers side of the engine at midpoint just below the exhaust manifold. It will have a single wire running to it and be plugged into the sending unit.
yes any cluster from 88-95 is interchangible
The engine coolant fan can keep running after the engine is turned off in any car because the temperature gauge is in the radiator. As long as the radiator is still hot, the fan will keep running until the temperature gauge says it has cooled enough.