If they are recommending a new transmission based on a code, its most likely something conclusive such as "excessive slip", i.e. (output shaft) is turning less than (input shaft * gear ratio) which tells the computer that the torque convert clutch isn't holding or working at all. A bad sensor can't really give this code, it would instead give a code such as "open shaft-speed sensor circuit". A code such as "excessive fluid temperature" may be less conclusive, however knowing the vehicles usage, I'd put my money on the temps actually being high, vs a bed sensor.