Water boils at 212 degrees and will stay at that temperature until all the water is gone (at sea level and not under pressure). It can't get "too hot." However, the bottom of the pot could scorch the extract if you leave the heat on while you add the extract. Turn off the heat and make sure the extract has completely dissolved before you turn it back on.
As for being shy of your projected OG, be sure you thoroughly mix that water you are adding at the end. If you don't, the less dense added water will be at the top of the denser wort and your OG reading will be way less than the total if it had been all mixed together. Eventually it will all even out as the yeast action roils the wort but your hydrometer will not read correctly at first.