Even so, if your cooling system can't keep your engine from going over 200 degrees with a 180 thermostat, it's not gonna be able to do it with a 160. The problem is with the cooling system, not the thermostat.
Depends on what and where that loss of efficiency is located. I've had and seen many motors go below 200 when switching from 180's to 160's. The number on the t-stat is only the full open rating and not much to do with what temp the motor will actually run at during heavy sustained loads or WOT blasts. That, as you said, boils down to the cooling system and water pumping capabilities. Have to keep in mind that the t-stat CONTROLS the temperature via the AMOUNT of water it will allow though it and a lower number gives you a head start on higher flow rates than a higher numbered one will. So, in essence it allows your engine to run cooler under lower loads and gives more headroom before achieving max temps under heavier sustained/WOT loads. Well known fact that engines make more power when they run cooler, engine dyno, rolling road, street, or track. Denser air/fuel charges make more power via stronger inertial ramming and also allow the engine to become more octane tolerant at the same time. Win win.
Yep. And higher ignition advance consumes more fuel to lean out the mixture. Which is exactly why most never fully realize the max ignition advance an engine will tolerate to maximize manifold vacuum at idle and steady state cruise. It'll flat out buck, pop, snort and lean surge its way out of fuel before you ever reach or hit that limit. Air bleed tuning becomes almost mandatory to ever fully get there.
Actually.........it's a well known fact that heat makes power. The hotter those cumbustion temps are, the more power will be made, HOWEVER there is a limit as to how much heat engine components can tolerate before they become destroyed. Of course the colder air being sucked in, the better (more oxygen and more dense), but that is a completely different thing from combustion temperatures. I've seen where people ran 160 thermostats and still ran way too hot because either the radiator was deficient or there simply was not enough air moving through it (cooling fan issues).
Yes heat is power, more like heat is expansion which turns the crank harder, but these are octane limited applications. Efficiency can improve more towards adiabatic but power will suffer. With a hotter t-stat, you get faster head starts towards full heat saturation points of cooling systems. This leads to hot spots(glowing exhaust valves and carbon deposits) in the combustion chambers. Octane tolerance quickly goes away as end gas temps get out of control and you're forced to increase octane, reduce timing, and/or lower output before something burns up in short order due to pre-ignition or detonation. As for induction temps of both fuel and air not having anything to do with combustion temps.. flat out and completely wrong. It does and always has directly correlated towards an engines octane tolerance and tuning aggressiveness. It's so pronounced that the fueling and spark can be changed to take better advantage of it. Ever race a cold engine? Dyno operators, engine tuners, drag racers(fans, iced manifolds and nitrous sprayed into radiators before pushing the car towards staging?), and just about anyone who's ever fiddled with iced fuel sources(cool cans) and cold air intakes is well aware of the physical relationships. Fully heat saturated engines produce less average and peak power than cool ones despite the cooler engines thicker oil/windage and pumping losses being higher. It's not magic.. purely the physics involved with colder air/fuel charges improving power output.