thermostat question

The bleed hole helps in filling the system, it allows the system to burp, if you will. I would NOT run a 160*, running and engine too cool can cause premature engine wear.

I run a 180* with a bleed hole drilled in the rim and have zero problems on hot days. You "might" have a bad cap too, if it's not holding proper pressure you might get more overflow than normal. I would also check your bottom radiator hose and make sure it's not collapsing, if it is make a coil/spring out of a coat hanger and put it in the hose.

You don't want a thermostat allowing to fast of a flow because it needs to sit in the radiator long enough to cool. Likewise you don't want one that allows it to sit too long.