I would not buy GLM products. One is very hard for warranty claims --- 2 is GLM = GOOD LUCK MARINE - that is the industry standard for GLM products among marine industry persons.

Have ask was it ever determine what the OP exact set up and parts used here ? Very hard to pin point any correct answers without knowing. We all can throw darts without knowing exactly the set up and parts.

The setup is as follows:
Hardin stainless crossover and thermostat housing, no thermostat, restrictor plate with 1/2" hole instead of thermostat.
Stainless headers (CMI, I think?).

All your water is bypassing the engine going through the bypass. I had to add a flow restrictor to mine. I 3D printed some restrictors and then I drill them out a little bit to achieve proprer pressure. A piece of stainless round stock with a 1/4" whole worked on my last setup. I put them right before the thermostat housing (arrow pointing) and drill them out with a cordless drill on the water. This is the setup on my new engines this year. I also have them in the back of my intakes that feed water to my exhaust. I have about 2-3 psi at idle and 20 psi at top RPM.

Also, I'd install a couple high flow 140° thermostats with a couple holes in them.

the water will always follow the path with the least amount of resistance.it is easier to go through the bypass than through the block,espically the reducing washer in the t stat housing.

Thanks for the info. I'll give it a try and report back.

Update: I installed restrictors in the crossover bypass hoses. This brought the effective diameter down from approximately 3/4" to 1/2". On a test run today, I saw NO wild fluctuations of water temperature. At idle the temps are 125-130, and when running at 3500-4000 rpm for a few minutes the temps were 150-160 (oil temps 210-220).

Update.

Ran the boat a few times this weekend. I am seeing water temps higher than previously reported. I saw 180-185 on one motor, with oil temp of 220. Other motor had water temp of 160-165, with oil temp of 200. This was running at 4200-4400 rpm. So I am not sure if these restrictors are the right way to go?

What is you water pressure at speed? And where is it taking the pressure at? Cooler, block, intake manifold?