Yes, that's normal. All those watts you're generating have to go somewhere, and most of the energy ends up in your wheel rim as heat.
Don't worry, Fliiiight is incapable of heating your wheel to extreme temperatures. Wheel temperature should peak at about 60-70 degrees celsius. That's much lower than when you apply your brakes during a hard stop.
Why do they peak? The faster you spin your wheel, the more power you can create. But as your wheel speeds up, it also encounters more airflow, which cools it off again.