You need a micro to talk to this sensor.
You could use a PIC16F84, for example, but you need to know a little about programming it, since you have to emulate an I2C interface to talk to the sensor. The rest can be done pretty much by comparing the setpoint to a reference and deciding when to turn on/ off the heater.
For the display, you can use an HD44780-based display, which can be driven by the same PIC, without too much trouble.
As you can see, this is not a trivial task. Is this a school project?