Many thanks to all for the inputs and suggestions. We do have the situation under control. I like to try and remember to close my threads with a resolution post.
The primary change we made was to install a 160 degree thermostat. The gauge now indicates about 160 when driving and will go to just below 180 when you stop after driving for awhile. It drops immediately when you start driving again or speed up the engine to get a little more air and water going through the radiator. We are satisfied that this is acceptable operation for our use.
As we did our troubleshooting we did determine that the block and radiator are very clean and flow water very well. Using an IR heat gun I do think the gauge is reading maybe about 10+ degrees high.
The one variable left is the condition of the impeller on the water pump. We do not know what was done to the pump when the engine was rebuilt. My thinking is that if we can easily find rebuild kit we will do that just to eliminate another unknown.
