Haha - I do like a good technical debate!
I did a lot of work on engine cooling systems in 2008 as part of my final year engineering project and really enjoy this subject so my thoughts are as follows:
From the graph I have attached you can see that at normal atmospheric pressure, ~101 KPa or just under 15 psi, water will boil at 100 deg C. If the pressure is increased, the temperature at which it boils increases. Whilst if the pressure decreases, the boiling temperature also decreases.
Cavitation occurs when the pressure of a liquid drops enough to cause it to boil at whatever temperature it is at. In engines, the motion of the pump impeller in the coolant creates both high and low pressure regions around it, in much the same way an object, such as a car, passing through air does. Cavitation will occur in the low pressure zones of the coolant if the temperature is high enough to cause it to boil. So, for example, if the pressure of the coolant at one point near the impeller is ~70 KPa, than the temperature at that point only needs to be ~90 deg C for cavitation to occur. Cavitation around the water pump will show as pitting on the pump housing and impeller.
The reason race engines such as Danny's usually feature larger water pump pulleys when using otherwise standard water pumps is to reduce the impeller speed. Ford did not design the YB engine to run at 10,000 rpm or whatever Danny's does, so if the impeller speed was not reduced either the coolant pressure would be too great (possibly causing things like heater core failures as mentioned by Phil) and/or causing cavitation at the impeller due to it rotating at a speed higher than it was designed to.
With regard to the location of the fill point, if the cooling system fill point is lower than any of the coolant passages in the engine the system may be difficult to bleed and the possibility of pockets of air being trapped at high points exists. Cavitation is not the correct term here, rather this can cause air locks in the system which hinder coolant flow, or the formation of pockets of steam at very high temperatures and pressures which can cause damage to the engine.
Back to the flow rate question, I believe Phil is correct with regard to coolant flow speed. Heat transfer is not an instant process, and water takes a fair amount of time to heat up and cool down relative to the engine block and radiator. This means that if the coolant flow is too great then not only will it not be taking as much heat away from the engine as it potentially could, it will not be losing as much of its heat to the air passing through the radiator as it could. If coolant flow is too slow the engine will produce more heat than the coolant can carry away. Both would result in an over heating engine.
So the ideal point is indeed somewhere in the middle...
Sorry about the length there, I hope you find it useful.
Regards,
Wagin