The high oil temperature is a known issue - we don´t model the oil temp ourselves (using standard X-Plane) and something must have changed. It is purely cosmetic, though - it should not cause an engine fire.
To avoid getting "failures" you can switch those off in the failure menu. If you have failures enabled, they are totally random, X-Plane does not model failures do to engine exceedance.
The only failures you would get due to exceeding a limitiation would be flaps torn off at high speeds (there is an extra option for that) and tires blown for overstressing them laterally.
Cheers, Jan