The heater nipple works. People do it all the time with the 5.0 engines.
In a perfect world there would be a continuous flow of water through the hose (open heat valve). In reality as long as you keep the sensor close (go low profile, not a mountain of adaptors) there is enough turbulence the water will make it up toward the sensor and the metal will conduct heat as well. It might read a few degrees low, but that won't affect anything in the tune.
That will work better than an after the thermostat coolant temps sensor. That will read the engine being cold as it warms up, and suddenly up to temp once the thermostat opens.