Trying to locate the automatic transmission fluid temp sensor on 1997 Saturn SC2

checked code and it indicates senor is not working

first of all, a free code pull never identifies a bad part just a failed system.
the sensor is under the air filter hose assembly at the top of the trans next to the accumulator spring cover.

would this sensor -if bad- cause the transmission to not shift into 3rd gear unless the car has warmed up after 10 min?
no, it just measures the temp of the fluid. if it is after it warmed up, then it is a seal that is very hard cold and softens up when hot and moves or applies.
at any rate, you need a trans shop to verify the problem and give you a bid.

Thanks for this info-it was VERY helpful!