Some great logical answers here. Thank you for your input!
With regards to thermal paste, I always thought that there was no point to it. Copper is one of the best heat transferrers for its price and it has also been proven that rough surfaces are better than smooth for conducting heat. I suppose the argument is that if you have a paste there are less contact gaps between the surfaces as the paste is semi-liquid (more contact = more heat transference).
The best thermal pastes are copper-based, I would assume.
The thermal sensors though... It does beg the question - why put four thermal sensors in such close proximity to each other on a CPU/motherboard if there is quite a large tolerance allowed? Why not just have one? In case one fails perhaps? Never known this to be the case for a CPU!
I guess the only answer to heat dissipation is to use as large a heatsink as you can fit in your case and make sure you use the best conductive material you can get your hands on.