Congrats on all the work you did. Seems like you are learning a lot about your car and gaining some confidence.

Now, let's see if we can help with your water leak/consumption problem: Have you squeezed the upper radiator hose when the car is hot? After the car has run for several minutes after heating up, it should be stiff from the pressure in the cooling system. If not, or if it goes limp very quickly after shut off, there is a leak in your cooling system somewhere. Also, pull out the spark plugs and see if you have any white build up on them, or if they look wet. This will tell you that coolant is somehow getting into the cylinders.

I suggested the squeeze test, above, because you might have trouble finding a shop that has the proper adapter to do a cooling system pressure test. Most of the Stant (the company that makes the lion's share of cooling system pressure testers) adapters for testing cooling systems are plastic gadgets and are fairly inexpensive, but the Volvo adapter is a machined aluminum billet and costs nearly a hundred dollars. Only shops that do a lot of work on Volvos are likely to have one. But, if you know a shop that does have one, a pressure test on your cooling system would be the best way to diagnose the leak.

Just about the only things back by the heater hoses that carry coolant are the heater hoses and heater control valve. Why the engine running would stop the leak, I don't know.

Do you have an inspection mirror? That is a mirror on a long, telescoping stick and mounted with a pivot so that you can, together with a flashlight, peek around in places that you could not normally see. They are fairly inexpensive and are worth their weight in gold.

If you can avoid running the car until you get the leak sorted out, please do so. You don't want to risk doing damage to the work you have already done. And, getting an inspection mirror and looking around where the leak comes from would probably get you answers about where it is coming from.
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1955 Human, Scott; 1991 745 Turbo, Brunhilde; 1990 745GL, Snuggle Bunny