The 3 cylinder 2000 was made from 1965 through 1975, so if he has only owned it for 25 years, it was owned by one or more previous owners for at least 23 years. It originally came from the factory with a 12 volt negative ground system. While it is possible to hook the battery up with a positive ground configuration and re-polarize the generator so that it also charges the battery when it is hooked up as positive ground, it was never recommended. Some previous owner could have rewired it to be positive ground at any point before he got it. One of the main reasons that car and tractor manufacturers switched form positive ground to negative ground back in the late 1960's through the mid 1960's was because a negative ground gives a hotter spark.
The voltage stabilizer is actually a temperature sensitive self resetting switch that switches on and off once every 1.5 to 2 seconds or so. A digital voltmeter will not be able to keep a steady number in the display from the constant switching on and off. An old fashioned analog voltmeter will show the average voltage, which should be between 6 and 7 volts.
Your "other" question:
First off, in a positive ground system having the positive side of the battery going to something, or grounding something, does not provide "voltage" to it. It provides ground. The "voltage" is the -12 volts from the other side of the battery. Everything is always measured relative to ground in any system, whether it is positive ground or negative ground. The temp sender (sensor) is grounded through its body to the engine, but there should be a single wire going to it from the temp gauge, and that wire should come from the side of the gauge that is not connected to the voltage stabilizer on the back of the instrument cluster. If the gauge doesn't work wired like that, try reversing the two wires on the gauge, as it might require the current to flow in the proper direction to function properly, and since it is positive ground instead of the original negative ground, the current may be flowing in the wrong direction and the needle might be trying to go toward the colder side when it is already pinned there.