Since there aren't too many places that would need to be labeled I would label it on the map, with contour-like labels. I prefer to avoid using legends if the information can be placed directly on the map. Allows the reader to see the information in the context of the map directly, without having to go back and forth between the map and a legend.
If the temperature applies to the water, too, then I think it's okay to continue the line into/across the water. If it's land temperature only I would cut it off at the land.