Some heat wrap on that down pipe and any exhaust pipe that is close to the fuel lines on the frame will help keep that motor bay cooler and reduce the risk of melting stuff.
As far as the egt gauge goes. I always like to assume that the egt temperature is 200 degrees hotter than what the gauge is reading. So personally, I like to keep my egts at 900 degrees or less for safe measure.
For sure adding a bigger and wider intake filter/box/pipes will reduce egts. Lowering the egts=more fuel you can turn up=more power! When turning up the fuel, start in small increments. 1/8” to start and then test run it to check performance. Finding that sweet spot with fuel and timing takes a lot of patience, testing, and experience. It’s a never-ending experiment.