The thermostat does regulate the temp in the motor. It remains closed to allow the motor to build heat and once it reaches the set temp of the t-stat it will open. So a 160 t-stat will open at motor temp of 160, but all t-stats are not full open till they reach 15 deg above set temp. A 160 is not full open till it hits 175, 180 at 195 and so on. The t-stat is also meant to help the motor make heat to get oil up to operating temp.
The temps of the outside of the block and heads can be read with a good digital laser gun. Thats how the temps were measured on the motor. If outside metal temps are cooler than what the gauge is reading, it's a given the internal temps must be cooler as well.
Cost at retail now is $39.95 a gal. Our dealers sell it for less then retail around $32.50. Most V-8 small block motors whether they are Chev,Ford, Mopar take 4 and part of a 5th gal to fill. Big blocks V-8 take 5 and part of a 6th.
All gas burning cars should be no less than 5% water after the change, diesels are 3%.