If you want to modify the t-stat in some way and test it.... remove it completely and run the car without it as long as you do not have any long , steep ascends.

brown residue... not sure, thats kinda ambiguous to me. But might indicate the maintenance history of the coolant in the past.

Definitely the cheap stuff first.

I am almost certain that line is 100*C

the major engine damage seems incredibly unlikely under 100*C.... slightly over it on a repetitive basis and I wouldn't put my word behind any guesses.

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