Does a 100 usage of CPU is because of overheating?

Everytime I play a game my cpu goes 100 and after checking my cpu's temperature using cpuid hw monitor it shows 80+ celcius idle and 90-100 playing. I also wanna know if this causes fps drops also.
 
If you're using the stock cooler, then make sure that all 4 pins are fully locked in place. Best is to follow kestzro's advice; thoroughly clean the old thermal paste and apply a very thin layer of new paste. Remember that it's purpose is to fill the voids, not to isolate the CPU from the cooler. Applying too much paste can cause the issue you currently have.
 
Yes I'm using the cooler that comes with the processor and I checked the fan and its fully locked, but I didn't removed it because I don't have any thermal paste. Should buying a new one a good idea? Planning to replace my cooler with this one https://www.mightyape.co.nz/product/Deepcool-Ice-Edge-Mini-FS-CPU-Cooler/21002529. Cost 10$ in my country.
 


Yes, CPU does dictate how many FPS you will get, however with most newer games they depend more on your graphics card. Bring up your resource monitor and see how much use you have at idle without any games or any other programs running, it should be less then 10% with just windows running (or whatever os your using) Then launch a game and check your usage while the game is running. This works better if you have duel displays but you can still get an idea of how much CPU the game is taking by pressing alt+tab back to the desktop, you can also try to run the game border less which works much better for people with just 1 display. If your CPU use goes from 0-10% to 90-100% then the game is maxing out all of your cores on your CPU and that is leading to frame drops in some games if this is the case. However with 80c you need to stop what your doing and check your heat sync and thermal paste! Are you running a laptop? Some mobiles are designed to run hotter... May I ask what game your trying to run and what CPU your using? Do you have this system overclocked?
 
I'm using a desktop.

Specs:
Asrock ConRoe 1333-D667
Core2Duo E7300 2.6ghz // I don't know how to overclock so nope.
4gb ddr2 ram
Geforce 9600gt

I tried installing Deadspace 1 which is really old game and I've run that game 60fps high before. But now that I've tried playing it again, I only get 20-30 fps with stuttering! That's when I knew that there's a problem with my computer. Not only games got slow, even browsing got slow especially when watching videos on youtube.
 
That isn't a very good cooler, but cooling a 65W CPU isn't that difficult.