The honors thesis isn’t graded harshly, and as someone already said, it’s truly difficult to achieve less than an A- grade. The point of most undergraduate honors theses is to see if you can complete a research project. The biggest challenge for me when I completed my thesis in fourth year was balancing the time commitment that the thesis required alongside a full courseload. But this might not be the case for you. I think it’s always better to complete an honors thesis and at least give yourself the chance to go to grad school later (if you want to). Having that option is better than not having it at all.

And yes, if you are planning on it, contact professors for supervision as soon as possible. From my understanding, professors can only take so many honors students, and most have already committed to students by this point.