I'm most definitely NOT a diesel mechanic, but I can tell you that an exhaust-driven turbocharger system designed to maintain sea-level pressure at altitude is used in some piston-driven aircraft, and that such systems are referred to as "turbo normalized". The purpose here is not to boost horsepower, but to maintain sea-level horsepower at altitude (within the limits of the system, of course).
As far as heat is concerned, while diesels, as used in diesel electric locomotives, may all have cooling systems, this is not universally the case with turbocharger systems in general, and heat can definitely be of concern.
Again moving into the aircraft world, I owned a flew a Piper Turbo Arrow IV for quite a few years. This plane featured a rather bargain basement turbocharger system (if anything in aviation can be considered bargain basement
" />), with no intercooling whatsoever, and a fixed wastegate. It was a terrific aircraft to fly with a very forgiving airframe, was relatively fast and economical and the turbo system helped a great deal when flying into and out of high-altitude airports, but the engine did require a higher level of management than most.
An inattentive or hamfisted pilot with poor engine managment skills could send cylinder head temps through the roof in a heartbeat due to the lack of intercooling, and the same with manifold pressure due, in large part, to the fixed wastegate. As a result, the engine (a Continental) tended towards early overhauls with inexperienced pilots, but was rock solid when flown by someone who knew what they were doing.
OK, now I've really done it. Not only not NG, but aviation related as well!
Scott