rite or wrong, I have always just removed the thermostat in those old motors. its not cold when it comes out so if they had a thermo, im sure it would be pretty hot. ill watch this thread and lean from the experts.
You can touch 120 water.After that the time you can touch it is less as the temp rises.Now to answer your actual question.The water is too hot coming out of that motor.You need to get it cooler.Pump and/or thermostat.I would replace both actually.Good luck.