Mine did that as well when my harness was out of wack. I disconnected, cleaned, and put in some dielectric grease. That fixed that issue. Then for the overheat, I would shift a bit odd, but had all gears. I have not had an issue since I put in a 6.0 trans cooler, but temps have lowered too, so I'm not certain it is totally fixed.
You could swap out the VSS. Not a fan of swaptronics, but for magnetic pickups, there is not much else to do. You can data log and review the data to see if the VSS signal jumps or skips, but not much else. The E4ODs do have some issues such as the solenoid packs going out. I think intermittent issues with the trans are typically electrical.