Do i have to replace the engine if the radiator coolant gets into the engine?

Hi, please excuse my English as its not my first language. I don't know a whole lot
about cars. I'm having a problem with my car and I'm not sure if this is the right place
to post this but here we go.
I'm an international student in a university in Florida. I bought my used Toyota Camry
2007 about 2 years ago. Although I've never had a single traffic accident, I've had a
lot of trouble with this car, but I've always had everything fixed(Or replaced) in the
Toyota dealership service area. The Cale Converter, the battery, tires,new spark
cables, new gas tank etc... . I've bought this car for about 9000 dollars and spent
more than 5000 dollars on repairs. I've always took very good care of the car and
never let the check engine light be on for too long without fixing something.
Now here's what happened. As i was driving in the highway my engine check light
went on, after further inspection i found that my temp meter was pointing to "high". I
stopped the car on the side of the road, turned my flashers on, turned off the car and
assumed that it needed to cool down a little bit. After waiting for about 20 minutes for
the car to cool down i turned the car back on and it kind of shook a little bit, kind of
like a mini tremor inside the car. It turned on nonetheless the temp meter was pointing
at the point between "too hot" and "too cold" so i continued to drive on the high way
but my temp meter kept getting higher very fast. Finally i reached a light (it was red) i
hit the brakes to a full stop, after which the light turned green i hit the gas but the
engine was unresponsive. The engine stopped making engine like noise(not sure if
that makes sense). Everything was working fine in the car, except the engine wasn't
working anymore, i assume because it overheated, it just shut off on its own to
prevent further damage. I didn't want to wait for the car to cool down again and restart
it because i feared the engine would break. i called AAA got my car towed to the
dealership service area. The guy towing my car said that he saw coolant fluid all over
the base of my car. I had the people at the dealership inspect my car, which took
about 2 hours. After which they told me that the coolant fluid has gotten into the
engine(i believe they said it got into one of the turbines of the engine), and that i would
need to replace my entire engine, the radiator and the temp gauge (which costs 6000
dollars which is money that i don't have). They said that the radiator could have broke
the engine which caused the coolant fluid to leak into it, or that the engine shot the
radiator which cause the fluid to leak out. Either way the coolant fluid is already in the
engine (according to them).
I asked for other options, they told me that i could sell them my car for about 1500
dollars (which would be a huge waste considering the amount of money i spent on this
car), or i could simply replace the radiator and the temperature gauge (which only
costs 700 dollars) and just hope the engine wont be damaged or wont break in the
future. They claim that if i only replace the radiator and the temp meter, it shouldn't
last me more than a few weeks before the car stops working again.
Also its important to add that I'm new to this country and do not want to be taken
advantage of.
now on to my questions.
Is it possible that these people are trying to rip me off(by having me spend about 5300
dollars on a new engine which i might not need)?
Are there any possible fixes for the engine(to get the coolant fluid out of it, if it was
actually needed to be fixed)?
Should i just go ahead and replace the radiator and temp gauge and keep the engine?
Should i do those fixes in a garage rather than the dealership service area(because it
would be cheaper)?
How much does replacing a radiator usually cost?
I hope i was detailed and clear in my description, Thanks!.