The E fan is a supplement to the mechanical fan, if the clutch is bad on the mechanical fan it may not be able to push enough air even with the E fan running to do the job.
Side note I put a smoker in front of the E fan (mine is on a switch) and some air was pushed out the mechanical fan side. I had a really bad clutch. The engine compartment on the XJ doesn't flow air well in the proper direction. Sitting in traffic worsens the airflow as there is no low pressure under the Jeep that you have while moving.
It may also be a combination of things, the radiator may be partially plugged with lime from using tap water to fill the radiator. I always fill or top off with distilled water.
Your dash gauge can't be relied upon to give an accurate reading. My E fan turned on around 220.
What you have to be careful of is that the coolant doesn't boil, not enough pressure (bad radiator cap) or a weak coolant mix can cause it to boil at a lower temperature. Once it boils it messes with circulation and the temperatures can run way high quickly. A 50/50 antifreeze mix will raise the boiling point around 10 F and 11 PSI of pressure will raise to 250 F.
But...... where the engine temp is measured isn't the hottest spot in the motor, it's the average temp of the coolant leaving the motor. Not a lot you can do about that. Some people increase the size of the radiator so the coolant going into the motor is cooler.
I've had more than a few thermostat failures.
Too much info
point is it may not be an easy fix. My solution was to put in a relay kit with a switch so I could turn the E fan on early when extended idling or in a traffic jam.