Yes and no.

The Kilopower design is not an RTG (Radioisotope Thermoelectric Generator). Those rely on the decay of a heavy element like plutonium to generate heat, which then generates electric power using a thermocouple.

Kilopower is making an actual fission reactor, which generates heat from the chain reaction of fissile atoms splitting each other. Another difference is that their design will utilize a linear-actuating sterling engine to convert the heat to electricity.

That being said, you're correct. The management of thermal flux and particularly discharging waste heat is hugely important to keeping this design working and efficient.