There's two outlets on the head and per the manual the bottom one has the thermostat - that said, I'd assume I'd use that one and block off the top? But in looking around the net, I've seen some people block off the bottom and use the top outlet?

Pictures of the motor (( Internal Combustion Engine ? )) and outlets attached - along with info from manual.

I believe what most do is remove the T stat and block off that port and just plumb into the top port, not too many 2 stroke machines use the T stats, if you were riding in the snow it might be a different story.
I think coming off the top port is mostly for convenience but it also will help to prevent an air bubble in the head.