Our temperature never gets above 185, which is the opening temperature for the thermostat. You should be able to run your engine at max RPMs without the temperature climbing above the thermostat rating. Perhaps you have an obstruction in your raw water pump or the heat exchanger from a damaged impeller?
We will occassionally get some condensation in the exhaust if the air is cool and wet. We saw more of it last year with all the fog and the cold lake temperatures.
What sort of bottom paint do you have on your boat? We use Pettit SR-21 and it produces a slick, fast surface.