Ok but then where does the oil get cooled? The sump is supposed to contain the coolest oil in the engine and that is where the returning oil dissipates it's heat (I proably have that all wrong too).
Sure, be happy to help explain this but you have to look at it as a whole for it to make sense.
A good thermal imaging scan of a machine shows this very clearly for the eye to see.
For discussion purposes, lets say an engine generates 1000 units of heat ( just to pick a number that's round)
700 of those units come from the heat of combustion
300 come from the total area where friction is happening ( cylinder walls, pivots on piston pins, valve stems and everything else realizing that the journal bearings should not be contacting but fluid shear is generating some heat too)
Out of all of that heat- some goes out through the exhaust, some radiates from the mass to the skin of the engine, some is removed from the coolant. ( the key here is physically removed from the engine)
That's going to account for say 600-700 units ( lot of variables affecting that)- that's going to be the bulk of generated heat.
Now the oil absorbs its portion ( still in the engine so the engine has yet to be 'cooled)- heat is removed from the skin of the pan and into the air ( while its in aerosol form, thin film and even streams so that's much more surface area and a variable)
Whatever "remains" becomes the "normal operating temperature" of a machine.
its at that point where the way its operated determines the additional properties of the oil, coolant or other transfer means ( external coolers etc.) that need to be added.
Granted this is a simplistic breakdown at 1000 ft. but that's essentially the process and how oil absorbs and removes heat in a machine.
This is why things like varnish ( just like scale in a steam system) affect the heat removal from the oil