I installed an inline thermostat and my engine temps are significantly lower than before

 

The thermostat is opening and closing, that's why the temperature varies. As long as it stays in that range, I would not be concerned. My temperature ranges from 165 to 190 degrees at about 75 ambient and city driving. It gets up to 195 at stops. Per my experience air bubbles disappear after a few heat cycles.

 

Remember that once the thermostat opens it has nothing more to do with the engine temps. The rest is up to the efficiency of the rest of the cooling system, primarily the radiator but also the fan clutch when the engine is idling.

I installed the genuine gray, 180° thermostat in my truck 7½ years ago after the old thermostat stuck closed and the temp spiked to 220+. Cruising temp according to the UltraGauge is generally 188.6°, sometimes dropping to 186.8°. At idle it's generally in the mid-190s, sometimes a little higher. And that's perfectly okay.

BTW, when I had to replace the water pump four years ago I replaced the original fan clutch with a Hayden 2991. Same results.

 

It does sound like you might have some air in the system, that or perhaps a temp sensor going bad. Did you follow the bleeding instructions in the kit to a tee? If not, go back and do that. https://store-9jc1bjf1r3.mybigcommer...thermostat.pdf