Yep, the red sensor goes where the red plug is! It is somewhat comforting to remember that the geyser of water that occurs when you pull the plug can not actually reach any higher than the waterline. So pictures in your mind of it hitting the ceiling are just your imagination at work. However it is a good idea to locate the key on the sensor and orient it properly before pulling the plug all the way out. That way you can pop the sensor in quicker. The sensor should have an o-ring seal in a groove. It is a real good idea to lube it generously with silicone grease, otherwise it can easily be sheared on the way in. It wouldn't be a bad idea to replace it with a new one before you install it. O-rings are cheap and it pays to have a spare or two.
Gary H. Lucas