If the leak is truly from the hose, first try tightening the clamp at that end. If the leak is from the joint between the cylinder head and the small aluminum housing that the hose connects to, you must remove that housing and replace the rubber seal. I have seen aftermarket seals turn to mush after a few years of use - inferior type of rubber was used. See if you can obtain the genuine Volvo part.

As others say, go gently when removing and fastening the 10mm nuts on the housing's skinny little studs. Soak with a good penetrating lube overnight. The housing only needs to be tightened gently to compress a new seal enough to be watertight, if you have cleaned up the surfaces which the seal contacts.

Yes, a new thermostat is a good idea. I prefer the Wahler 92C units, which is what was in the box when I got one at a Volvo dealer.
--
Bob: Son's XC70, daughter's 940, my 83 240, 89 745 (V8) and S90. Also '77 MGB and some old motorcycles