[m5extc]

You are basically correct on just about everything. The hole in the thermostat should be no larger than 1/8" otherwise it will bypass the function of the thermostat. After you run the car and feel the coolant getting warm, and depending on your plumbing maybe even some flow, cap the system. Take it out and drive it, then let it sit. After sitting for 20-30 minutes open the cap and top off the coolant if needed. If you did have to top it off, drive it and repeat at least on more time.

Andrei