jeep 1999 grand cherokee engine temperature problem

May be thermostat,but i think you may need to check your exhaust when engine is hot,you may find that you are loosing a little coolant out the exhaust,this would be a sign of blowed head gasket,or one more conclusion would be your catilac converter is stopped up causing a burnt smell,

when you change out the thermostat, make sure you use the actual gasket, the head has a bypass port that needs the gasket in-between to limit the flow, mine would warm up nicely awhile running sitting parked, but then as soon as you start driving, the temp would drop off to nothing,, this bypassing causes the loss of temp and then the thermostat closes, using the actual gasket fixed my issue as it will fix your problem, your welcome :-)