Why would a 66 Impala 396 run 200F on the freeway but overheat in traffic with 4 core rad shroud 7 blade fan?

First off, is the cooling system all stock as it came from the factory? I have a 427 version completely stock with the 4 row as you describe. I had same problem until I did the following.

The cars cooling system was NOT by design set up for a coolant recovery or plastic can attachment. The upper portion of the upper radiator can was for the needed space in the cooling system for expansion. If your filling the system 100% full when it opens the thermosat it is too full and will puke out the coolant mix. Leave it about 3/4 full (upper tank) when the thermostat is open and coolant is visably flowing with the cap off. Make sure your cap is good to 18 lbs.

2nd. the fan clutch from the trucks for that year will work wonders for you in keeping temps down. I live in Yuma AZ. where summer temps reach 117 plus and stays there most of the mid summer days. My big block with 4 speed and all stock 4 row cooling system and a truck heavy duty fan clutch behind the stock fan and a 160 thermostat lets me run about 165 to 170 on the interstate all day long here and it will climb to about 195 sometimes towards, but not to 200 at a long city stoplight. Never been over 205 since it was returned to stone stock and a truck fan clutch and 160 stat.

GM had it right for these cars back then and it still works today. I had a twin electric fans set up on it for a while it would not stay below 200 on the best day out. The wife of the owner of the oldest radiator shop here in town saved me many headaches when she told me how to do the above and added, never add the catch recovery can system and get rid of the electric fans on it at the time.

Sometimes, the old guys and gals still have it. !!