For what it's worth, I've read in a respected automotive engineering journal that it's the calcium in tap water that is a mild poison to the cooling system. They didn't say how, but I surmise calcium may interfere with precipitation of the sodium silicate on the metal surfaces. Sodium silicate is a water glass that coats and protects the metals surfaces from corrosion.
For that reason I avoid tap water whenever I can when filling the cooling system. I think it's okay for flushing.
And yes, treat the thermostat housing bolts with never-sieze. I've already had to helicoil a pair.
95 E320 Cabriolet, 131K