Trans cooling

The big reason temperature is higher in traffic is because the torque coverter is spending more time unlocked. As another poster said, slip it in neutral when waiting at intersections. If you have an EGT gauge, check the difference in temperature when idling in drive vs neutral. The temp will be slightly higher in drive because of the extra fuel being burned to overcome resistance in the torque converter. Some of that heat is going directly into the transmission fluid.

I towed 11,000 with my 07 Cummins with the same trans in 100*F heat up mountain passes in Utah and my temps spiked to around the same. No need to worry. If it gets too much above 230* you might need to address it. FYI, the "TRANS TEMP" idiot light is set to come on at 260*.

Moved from dinghy towing

You should be using Synthetic trans-fluid wnen towing since they removed whale oil from itanyway. It will handle signifintaly higher temps as well as offer better cooling charictics.

On the freeway, does it lock into overdrive?

I'm not sure about the paticulars of your truck but once the torque converter locks up, the heat generated by pumping transmission fluid drops dramatically as it's no longer being asked to transfer power between the engine and transmission.

In city driving, the fluid is doing most of the energy transfer and that generates heat especially if you do a lot of hard acceleration.

Secondarily, in city driving less air is passing over the trans cooler due to slower speeds.

This is why you get a counter intuitive temperature reading with lower temps when you are putting out more power on the freeway.

There's nothing wrong at all with your temps and it needs to get up a bit to burn off moisture. Trying to lower it any more is just a waste of money IMHO.

For starters, 212 is a safe trans temperature. There is no reason to bat an eye at anything under 230. 165 is a little on the cold side in my opinion, but not damaging.
Adding a larger pan will keep a trans from heating up as fast (so it will not get as hot on a climb, but it is not the remedy for a loose TC that is generating heat all of the time).

212 is not all that high. By shifting into neutral when stopped in traffic you can lower the temp because of the torque converter slipping while stopped. I'd try that before spending any money.