Hot water from the engine enters the top of the rad via the top hose and travels down through the rad.
As it flows through the rad it cools (loosing heat to the rad and thence to the air flowing through the rad).
The cooler water from the rad enters the engine via the bottom hose and gets heated by the engine as it travels through the water jacket (so cooling the engine in the process).
Imagine if the water coming out of the rad and back into the engine was the same temperature as the top hose. The engine would put more heat into the water, and the temp would spiral upwards.
Although the temperature appears to be stable in your top hose, it's actually fluctuating as it circulates through the whole system.
HTH:)