|operating without the side panel on is NOT recommended unless you also place a fan blowing on the unit.|
Airflow is designed with the case closed. Opening the case leaves static air pockets and the air doesn't flow as designed. This can produce false readings and overheating.
Well..that depends on what type of air flow is in the case. For instance, if you have only a CPU fan and one power supply fan that is located on the bottom of the power supply; still within the case - there is no wrong done in doing that because the warm air has an escape.
I recommended that temporarily to see if the problem persists. I have never had a problem with a computer overheating when trying that method. It helps to rule out other factors.