The coolant level sensor develops leaks over time that corrode the terminals and set off a "false positive" condition...in other words, the light on the dash tells you the car is low on coolant, but in fact it is not.

You can attempt to disconnect the sensor (just near the lower part of the coolant tank) and dry the contacts and clean them with contact cleaner. I've done this and it works for a couple of days, but the problem will resurface.

Replacement of the sensor is the only cure. An inexpensive part (around $40), and can be done in a few minutes. Since the tank has to be drained to do this, pick a day that you plan on flushing the coolant to perform the repair.

As far as your stop-and-go-traffic temps, it's considered normal by most on this forum, but I found that I stopped seeing the temps you describe after my headgasket replacement and top-end overhaul. Car now sits at 89C even in the severe Texas summers...90-92C with the A/C at full tilt and sitting in traffic...

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2009 ML350 (106K) - Family vehicle
2001 CLK430 Cabriolet (80K) - Wife's car
2005 BMW 645CI (138K) - My daily driver
2016 Mustang (32K) - Daughter's car