I wouldn't run that engine/camshaft combo at 12* initial. The 23* is closer to what I would run. If it starts when hot at 23, run it.
Initial timing should have zero effect on highway cruise temp. You're into the mechanical advance and total timing may be an issue.
Possible the shroud is packing air, restricting flow?
Could also be really lean. Does it surge at all on the highway? Hard to tell without reading a plug or having an A/F gauge installed.
