Economic viability of on-package, in-situ cooling based on Thin-film Thermoelectric Coolants (TF-TEC) for hotspot cooling involves myriad challenges necessitating engineering trade-offs. Principal factors include the cost of integration, the net energy consumption of the TEC based system, as well as systemlevel complexities arising from issues such as mutual thermal conflicts and interdependencies between the TEC and other package-level entities such as the Thermal grease (TIM), impact on the external convective cooling system, and the number of hotspots present. In this paper, we examine these challenges both analytically and empirically, and propose a heuristic based method to overcome them. The method forms the basis for a generic optimization framework that enables system-level optimization of on-chip thermoelectric cooling in a commercial microprocessor package. We find a resultant cooling of up to 3°C at TDP delivered per core with a ~11% improvement in energy efficiency.