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Here is the answer!
In Terminal, navigate to /Users/yourusernamehere/Library/TeXShop/Engines
Then pico sage.engine (to edit the file) and on line approx. 31, where the path including Sage.app is given (something like /Applications/Sage.app/Contents/Resources/blah blah blah), change the application name to SageMath-7.6.app (where of course you want it to be your current version number). In case you can't remember how pico works, do Ctrl-X and say Y.
(This is of course partly a note to my future self, because I will update Sage and wonder how to get SageTeX to run again, and not remember where to look to edit what file.)
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