A few things I would check:
1.) Temperature sending unit: The resistance is supposed to change with temperature and many after market units (made in China) are off the mark which can be why your gauge appears to read hotter than reality. A few years ago I found that Autozone sells units engineered in Wisconsin by Wells Vehicle Electronics which include engineering specs for resistance. (Looks like mfg is in Mexico) The large hole (TU25) for 66 calls for a range of 176 - 24 ohms between 100 and 220 degrees.
https://wellsve.com/custom_searches/pdf/sales_drawings/TU25C.pdfOr
https://wvebrand.com/part-detail/sales_drawings/TU22D.pdfI had a bad one that tested 11 ohms @ 180 and when replaced read 35 ohms @ 180 and the gauge problem went away. I tested by boiling a pot of water with an ohm meter attached to unit and an IR thermometer and observed the change in ohms as things heated up.
Autozone sells them under the Duralast brand as TU25. They used to sell the smaller hole units for earlier Cobra intakes as TU22 but those seem to be out of stock.
2.) consider pouring in a bottle of Water Wetter which is supposed to help with cooling
3.) As far as puking up water, if you do a pressure check and the cap is good, I would double check the torque on your heads to make sure that isn’t causing pressure in the system.
4.) I agree with others on the 160 thermostat and would at a minimum put in a 180
5.) Is the block bored 0.30, 0.40, 0.60?
6.) does the lower radiator hose have the spring in it to prevent collapse?