1: It should not have. The first filter is on the suction side so does not effect the output pressure. And it does not take 7 psi to flow through the filter. Most likely your system was just re-priming itself or there was some dirt in the checkvalves. A person only blows at about 3 or 4 psi...if you can blow thru the filter, the the fuel pump should be able to.
160 is actually the closing temp of a thermostat rather than the opening temp. Opening temp can be 180 or even higher. So likely that is the temp that the coolant opened, or it has not even opened yet, and so is maintaining that temp with no work being performed. If the thermostat is still closed, then it is just the flow from the bypass hose (maybe a 7/16 hole) that is allowing some level of flow.
Drive it and you should see the temp come down to the 160.
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