I would try putting in a thermostat first, 160 would be sufficient. I don't know if it originally had a shroud, but if it did, it needs to be there.
The temp sensor needs to be in the head, below the thermostat. Down in the block is too low, too far from the combustion area, will give a false cool reading.
If it has a history of running hot, there may be a circulation problem (rust) or a leaking head gasket.
A circulation problem, as in clogged radiator or coolant passages in the head, will typically show up as overheating under load. If the engine is hot, yet the air coming through the radiator is cool, there is a blockage. Also, feel the front of the radiator. If there are cold spots, it is clogged internally. And double check for external blockage, they can pack with sand and grass.
Overheating at idle, or blowing coolant out even when the engine is cool, emulsified coolant/oil accumulating in the crank case breather tube or under the oil cap are all signs of a leaking head gasket. Flat head engines are prone to head gasket problems. Typical causes are from being overheated, warped head, or improper installation.
If you do end up pulling the head, it will need to be surfaced and checked for cracks. The coolant passages in the head and block need to be cleaned. The block surface needs to be thoroughly cleaned with Scotchbrite. This is easier with the studs removed. If there is any doubt about the studs and nuts, replace them.
These are just generic answers, to get more model specific results, try posting on the "N" board below. Also a shop manual will be a very valuable investment!
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