MOSFET is overheating when running on a 20A load
Assuming you've actually measured Vgs at the MOSFET pins (it gets only about 90% of the drive voltage, and the drive voltage is heavily loaded by the LED), then one would tend to conclude that the MOSFET is not actually a genuine part of the type indicated. The certainty would increase to near 100% if the MOSFET was sourced on a platform that hosts bad actors. 

The dissipation should be no more than about 0.7W which will get hot without a heatsink, but not excessively so (150°C is excessive). If your traces or wires going to the MOSFET are thin you may also be getting heating from those sources. Tja is 62°C/W so the rise should be the order of 40-45°C. Rds(on) increases with increasing junction temperature, maybe 50%. But not 125°C rise worth.