Battling overheating new 360 build

Wait, how many changes did you do at once?

Get rid of the second bypass, all it is doing is sending already heated-to-the-limit coolant, back thru the pump for a second go-round, displacing the cold water that shouldda been in there. It's bad enough the first bypass is there, (which I severely restrict..... and I drive from April 10th to October 10th.)
Whatever pump you bolt on, and I highly recommend an 8 blade, it should have an anti-cavitation plate on it.
And why in the world you guys always always wanna run max timing right out of the gate is beyond me. Get your support works up to speed first, and your fueling close first, and then;................ SNEAK up on the timing. I guarantee you this;Guaranteed; on the street, your butt-dyno will not know the difference between optimum power timing and 2 or even 3 degrees less. So why risk a nuclear meltdown of your expensive engine for 5 to ~7 hp?
And finally, your cruise timing needs to be between 42 and 56 degrees (perhaps even more) to prevent overheating, burning up the headers, and getting lousy fuel-economy. So by disconnecting the Vcan, if it was in fact working, you're just inviting trouble.
And double-finally; Like you said;The thermostat sets the minimum water temperature. It does this by trying to restrict the water flow to below it's set point. It's normal condition is CLOSED. If the water is going round and round in the dual bypasses, it's gonna take a while for the stat to catch on; And the slow-as-molasses-in-January factory gauge is gonna be two or three minutes behind as to what is going on.
The cooling system efficiency is gonna set the maximum temp. And that has already been covered in this thread. After 30/35 mph, YOUR rad is likely the least of your problems. My rad is a 1973 pos that I have had since the late 70s, never cleaned it her yet.
One change atta time, starting with; putting the Vcan back into operation, resetting the all-in power-timing to not more than 34/35,at over 3000rpm,then getting rid of that second bypass. Then make sure that the air hitting the rad core support, is ALL forced to go thru the rad, not under/over/ around/or between the rad and the core-support.Then the anti-cav pump. Actually just do all of these at the same time,lol.
After you get it under control........ then you can start to experiment..... yes, one thing atta time.

Oh yeah you asked; My minimum water temp is 205*F and my maximum is 207*F. How can I even measure that? Think about it.
How can you set your AFRs with the underhood intake air temp varying from 180* to 400plus*?.. IDK either. And neither did the factory. Hence the OSAC valve,the heat stove,the thermactor trap-door, and the fresh-air duct. What were they battling? You guessed it retarded timing.
Somebody said to get rid of that flex-fan, and I agree. Once the car is up to cruise speed, and the engine is buzzing along, those flex-blades are flung flat, or nearly so, and they present a wall, a WALL, to the incoming airstream.
I'll tell you what is guaranteed to not make a wall, and that is a large diameter, high-attack, 7-blade, all steel fan with a thermostatic fan clutch. Don't bemoan the powerloss, it's not what HotRod or anyone else preaches; and if you lose the engine to overheat you will bemoan that worse. Think about it. Somewhere after 35mph the ram air should be cooling your engine, and that 7 blader may be freewheeling, with the thruput,costing you almost nothing, just like the flex fan, but unlike the flexfan, not presenting a 5000 or 6000plus rpm impenetrable wall; 15 hp myazz..Don't you believe it!
In order for your engine to make power it first has to survive it's owner.
I'm harsh I know, do whatever you think is right,lol.

I have a few thoughts.

As far as how many things I've changed at once? It's a completely new rebuild with a zero-decked block.

The second bypass is simply because the heater core is temporarily disconnected while I'm breaking the new motor in. Assuming there's a slight exchange as the coolant makes it's way into the cabin and back into the motor, the second bypass should be negligent, no? I want to ensure that the motor can properly cool with the heater core connected, as I plan on driving the car with heat in the colder months.

My understanding of the primary bypass is to prevent cavitation in the pump to begin with, rendering an anti-cavitation pump unnecessary. As far as the water pump, flow is controlled by the thermostat, what would the benefit be to switching from a 6 to an 8 blade pump?

I run as much timing advance as safely possible because that's the most efficient way to run the engine. I HAVE had overheating issues due to retarded timing, so retarding a car that's on 93 pump gas and still not showing any signs of detonation (see spark plug pic in first post) could be in-turn hurting my digging here. I did however lower it to 34 as stated before your post and noticed no change in cooling performance.

The car is currently cruising around 3000rpm, so I'm not sure why anyone would think the flex-fan at that point is creating a wall, but fans are cheap and it's a simple swap to see if that makes a difference. I'm certainly not running the motor out as it's only got about 30 miles on it.

My basic plan right now is I've taken a 360 and bored it out, making the block that much easier to heat-soak. I've increased the compression and believe I'm simply overwhelming the factory cooling system (that's already old) that was designed for a low compression, volumetrically-inefficient engine, warranting at the minimum a radiator upgrade to something more suited to a 400hp engine. I've significantly altered the power this engine has made and left the components that comprise the support system in place.

At the same time, I don't think I'm running as hot as I believe. A quick check around the engine bay with the infared gun concentrating at the water temp sender showed my hottest point to be 195 while my temp gauge was showing me at the very top of the arc. Most people say they're running in the 200+ range