What heats up the oil more than anything is the speed of the oil as it goes thru the valves, cyl, hoses and fittings. You can pump a lot of oil thru a small fitting but, each restriction the oil flows thru increases the velocity of the oil. Velocity of the oil flow creates friction and friction creates heat. Some of this heat is given off as parts heat up, but the oil is moving so fast thru those parts, it cant give off all the heat it accumilates. The only time the oil slows down in when its in the tank. A small capacity tank doesnt have the surface area to allow all the oil to cool off so heat will continue to build as it circulates thru the system. Tank size should be matched to oil flow and the usual recommendation is One gal capacity for each gpm being pumped. Hyd tanks should be long, narrow and tall instead of short and square to allow oil more surface contact for faster heat removal.
A point to remember is that the pump is still circulating oil, even when your not operating the control valves running the cyls in and out. Also pumps flows can be much higher than pump ratings when you are operating the control valves. A hydraulic cyl extending and retracting does change the values of oil flowing thru the control valve. The reason for this is due to the cyl rod taking up space in the cyl bore. When you are extending the cyl you are putting oil to the piston side of the cyl, the rod end has less oil holding capacity so as the cyl extends, oil flow going back thru the valve may be as much as 1/2 the amount of oil that is being pumped into the cyl. The opposite is also true, on cyl retraction, you are now putting oil into the rod end of cyl and the oil coming from the piston end can be twice as much as is entering the rod end. If you have a oil flow rate of 16gpm going into the rod end for retraction of the cyl, you could have 32 gpm coming out of the piston end. That little 7.5gal hydraulic tank should be starting to look pretty small by now.The bigger the dia of the rod, the faster the oil will be coming out of the piston end of the cyl.
There all kinds charts giving fitting and port sizes for various flow rates. Most of the splitter valves on larger systems use 3/4in ports. A 3/4in port can flow about 30gpm before velocity and associated heat starts becoming a problem. Not saying you cant pump 60gpm thru a 3/4in port, in fact, 60gpm will flow pretty easily thru a 3/4in port, but if you do, you will see a heat build up. Using dump valves to bypass oil around the control valve back to tank wont neccessary speed up cycle time. Reason being the oil still has to flow thru the cyl ports before reaching the dump valve. If you plan on using a dump valve to increase cyl speed, its best to also use a cyl with bigger ports, or at least a bigger port on the base end, otherwise the flow is still passing thru a restriction at the cyl.