Dan,
The blue tube is supposed to replace the vacuum (black) line that came from the side of the engine and goes to the second hole. Did you get a blue intake adapter that lets the chrome inlet tube connect to the throttle body? The blue tube is supposed to match that connecting adapter. I searched the internet and found a red adapter to match all my red stuff (see pic below). As far as the sensor, are you sure you have it in all the way? As long as there's no air leak it should work fine, same goes for the vacuum line.
