About a month ago replaced my Engine Coolant Temperature sensor and Thermostat in 2000 GTP. The operating temp of the thermostat installed is (90C/194F) however the temp gauge in the vehicle often reaches upto (105C/221F) before dropping down to (85C/185F) then builds back upto (90C). The temp gauge does a lot of fluctuating up and down within these ranges while driving, never noticed this before but then again never paid that much attention to it prior to replacing the parts. Is this normal?

Not everyday but now and again I notice some light smoke coming from under the hood when sitting at a red light. Popped the hood but cannot locate the source, slight smell of something. I did notice that Coolant resevoir does have some moderate sludge built up in it, could this be the culpret? Would a coolant flush remedy this or could there be a secondary issue?

Thanks for any input.