70C is hot, I wouldn't be comfortable with that. 50C is a more reasonable target.
The CPU fan *should* be blowing onto the heatsink, it reduces the chance of hot air pockets.
How is the airflow in your case? I would recommend at least one intake fan in the front bottom and an exhaust fan in the upper rear (often a good powersupply is sufficient). Two exhaust fans can work just fine too though. Try to keep your cabling tidy so as not to restrict airflow.
Like Emeric said, the onboard monitoring sensors aren't that accurate, and the issue can be furthur confused by monitoring software not interpreting it correctly. Try just turning your PC on and going right to the BIOS, and watch the temperature from there for a good 5 minutes or so. While the machine will obviously run much cooler when just idling in the bios, you can get some idea of whether the software is goofy or not.
If you're not experiencing lockups or strange crashes (explorer crashing especially), then you're probably alright......but 70C is really pretty dang hot man. I usually set my alarms at 70.
Slackmaster 2000