Small block coolant bypass hose diameter?

Do not reduce the flow through the bypass.

The bypass keeps the flow volume up in the cooling system, and reduces the thermal cycling stresses. Chrysler engineers got this part right, and they were kind of anal about cooling systems.

The LA engine had two different water pumps based on fan speed. The A/C cars had an increased fan speed, so mopar reduced the blade count on the A/C water pump. They were trying to reduce the pressure from the pump a little, it really had nothing to do with cavitation.

It looks like you have an under drive water pump pulley. I would increase the water pump speed by changing the drives, a slight overdrive from crankshaft speed would be good.

A high flow of water through the block from front to back is what you want the bypass helps do just that.

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