i don't think it would mask it for long.
also, the low operating temp. could screw with the engine control. on mine the computer adjusts stuff until the engine is warmed up- like a choke. much more efficient when it's "hot".
you probably should try another thermostat.
if it continues to overheat as you decribed, i think you probably are looking at a head gasket.
it's only time and money.
the comp/leak test and pressure tests could confirm, and sometimes compression gas can be seen coming out the radiator fill(running, cap off). fix it before coolant starts mixing with the oil. that's hard on the bearings.