The Ford temp sending unit is prone to failure. 45 years of age is a LONG life for a $6 sender. That's the first thing I'd try. Note that the sender should be in the block just below the thermostat, NOT in the surge tank. That was an early attempt by Ford/DeTomaso to fix high temp readings that scared drivers with the early 0-220F gauge. Next was a 6 watt resistor twisted, not soldered, into the rear wiring loom. They come loose from vibration. Third was a non-soldered 10-watt resistor, and finally, no resistor at all and a 0-260F gauge (with a resistor built inside) in 1973.
So your '74 car's 0-260F gauge should not have any external resistors for reasonably accurate readings, but it's worth checking. I've seen resistors crack. If it's actually the gauge, most vendors stock replacements. Fixing a stock gauge will cost at least as much as a new gauge.