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If you feel comfortable with it...go for it.
IMO, I think the dealer has been pretty accommodating with you so far. I have no doubt they have much less in the car than what they are asking as car's with that mileage and year model sell for 9-11k all the time where I live but that does not necessarily mean they are in as good of condition either. Having some form of service history means a lot to me. The water temp looks fine...mine stays around that range all the time. People that have no interest in working on a car run from a car like this I guess...if you do not mind getting your hands dirty and are getting a good deal you can save plenty of money taking care of the issues you have mentioned yourself. I would not let them scare you away as some of them would only feel secure with the warranty and peace of mind a brand new car would provide and that is their choice.
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