That is the dash temp sensor. The fact it grounds the light on suggests the wiring is sound... Doing this should also move the gauge. Did you try with the ignition on? If it still doesn't move, then a new sensor is probably on the cards with the following caveat...
Ignition was on when I grounded wire. Was surprised gauge did not move yet overheat light on when I grounded wire. When I performed actuator test with Tech 2, needle went to max and light came on. As engine temp showed 60deg on instrument data feed it was not registering hot enough to move needle.
Could also be that the gauge itself is stuck... A gentle tap of a couple of potholes may be enough encouragement.
I've tried a couple of "gentle" taps when driving at the beginning. Looks like replacement sensor is the way forward. Before I fit it can anyone tell me the correct code index for the instrument panel for my machine?
Thanks for reply Doctor G