Actually I am already using an Arduino with a temperature sensor (I have a few varieties of sensors I use) and in fact am using relays to control 120v devices (fans, etc.). However, this is more of a safety add-on for my arduino setup. It's rare, but I have had a couple incidents where my Arduino setup did not work as expected. So this thermostat is really a final hopefully fail-safe - if the Arduino does not turn off the circuit, I want this thermostat to do so. So I am just looking for confirmation that this part I found makes some sense, or for another suggestion. Thanks!
The thermal switch you have linked would work for your purposes. This kind of device you'd also find in coffee pots or such for overtemperature protection, but you also find them in "thermal plugs" or such because they're robust enough to take a lot of switching cycles.