That seems hot to me. My YM165D normally ran between 180 and 210 degrees when not working hard. I had installed a degree gauge as well having the warning light. I never saw the warning light come on except once when I was working in a ditch with the nose of the tractor at a rather steep angle downhill. The warning light came on just when the radiator cap let loose with a shriek! Loud and startling!! Steam everywhere! I backed out and it cooled down inside of half a minute.
The operating temperature varyied & seemed to depend quite a bit on if I was going uphill or down. It also depended on how long it had been since I had cleaned the radiator and also whether or not I had the screen installed in front of the radiator. I usually ran without the screen. To clean a radiator, use a LOW PRESSURE garden hose and play it on the backside of the radiator to force the dirt out the front. A squirt of dish soap helped, but be careful not to use a brush or to brush it hard.
Thermosiphon cooling systems are all about how efficiently they can exchange heat with the air. I believe that the OEM radiators had a high copper content and so were more efficient at exchanging heat with the air.
I always used distilled water, and the old fashioned basic green antifreeze - ethylene glycol - in a 50/50 mix. Yanmar preferred 60 water/ 40 antifreeze in their shop notes. You want enough antifreeze to protect from freezing of course, but anitfreeze is not as good a heat exchange fluid as pure water. That's why you limit the amount of antifreeze. You can try pure 100% water just to see if it makes a difference. Or check the gauge by putting the sender into a pan of boiling water.
Good luck, don't forget to check it again before winter.
There isn't any difference in the YM155 & 165 that I ever found...
rScotty