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Some thermostats have a small hole or notch to allow air to escape when the system is filled. If no hole is present, it might be a good idea to drill a small hole in the flange, maybe 1/8" or a little less. You don't want air trapped under the thermostat. I don't know if the modern thermostats have the same flow characteristics as what Packard used. A thermostat is supposed to start to open at its rated temperature. It may not fully open until the coolant is a number of degrees above that.

I took another look at the 1937-38 shop manual. It states that 1937 cars used cylinder head thermostats only. But, we know that is not correct for the CDs. It states that for 1938, all Eights (120s) used Sylphon thermostats for the grills. Thermostats in the cylinder head were available to improve performance in heater equipped cars. But, it also states that the cylinder head thermostat should be removed in the Spring.

With that, I will not add a cylinder head thermostat as it seems that Packard was concerned about overheating in the summer time with the cylinder head thermostat being used in addition to the thermostatic controlled grill.

In this snapshot from the shop manual, the first paragraph is for the 1938s and the second for the 1937s. I think the first paragraph (1938) is what is applicable for my 1937 CD since we know the CDs were equipped with the thermostatic controlled grill. So, the parts list including the cylinder head thermostat still makes since as it is listing what could be added in the winter time to improve heater performance.