our 230TE rises to just over 100 in traffic jams then the fans kick in (actually at 105 C) taking the temp back down to about 90, then the temp seems to cycle around those 2 marks until we get moving again.
That bit is normal according to the manual and Andy Gayle and most Mercs should behave in the same manner.
The fact that yours is blowing water out isn't normal and suggests to me one of a few things that are worth checking.
1, is the cap on the reservoir sealing properly?
2, is there a very slight leak on the reservoir?
3, are any of the hoses leaking?
4, is the coolant mix correct?
The reasons behind these questions is that it sounds as though the coolant in your system is boiling and expanding and being blown out of the system to relieve pressure.
If there's a leak anywhere then the system loses pressure and the coolant will boil at a lower temperature than normal.
So a quick check for even the smallest leak may solve your problem - I'd start with the cap on the reservoir they have a limited lifespan and are prone to failure on any pressurised system also it's the easiest/cheapest option to replace first
There's a very simple way to check your viscous fan is working
use the "carrot test"
Andy