I have seen many articles where one of the issues with cars used for short trips (and PHEVs) is that the engine doesn't get hot enough to expel moisture. The issue is that I haven't been able to get the Prime engine coolant temperature as shown on SGII to more than 197F. Even on my long drive from NY to IL last month, it momentarily went to 201F for a second when I really stomped on the accelerator. But I see the temperature at which water turns to vapor is 212F. So, I am wondering if it's possible to get the engine hot enough to expel moisture, unless I am missing something.
Those temps are normal. Those readings are NOT the exhaust temps which are MUCH higher and are thoroughly burning off water vapor which is a normal byproduct of combustion. It's just a matter of operating time for the entire exhaust system to reach full temp. Your car is fine.
A quick Google search yielded this: "repeated drives of less than 5 miles is considered short-distance driving." However in the Prius the engine might still go off and on during driving and you would want to accumulate 5 miles of engine operation I would think...