Does my car ECM use coolant sensor information for engine control. or it is using only for temp gauge and radiator fan operation.

But when i check through scan tool my coolant sensor does not appear among other sensors. in manuals also it refers as water temperature sensor.

Exactly what problem are you trying to resolve? .. Sensor readings in will be displayed on an 'actual scan tool' or scanner as CTS (Coolant Temperature Sensor) Should read engine temperature and sensor voltage... IF it ain't broke, don't fix it!

my temp guage rises red zone after starting the engine without overheating it. when sensor disconnect nothing happen (gauge not moving).if this sensor not affecting my engine performance can i keep it disconnect until repair it. no check engine light or fault code's