AMD

My question is do you or anyone know what kind of performance/stability improvements I can get by getting my hotspot temps under control?

Besides Games:

1. use fancontrol to control your... fans: https://getfancontrol.com/ and create a fan curve that is useable
2. if possible, deshroud your GPU. The plastic covers a lot of hot air.
3. when you have a backplate on your GPU, check if its thermically connected to the board via thermalpads. if not, get some thermalpads (not the cheap one I had but pads with a high heat transfer of at least 10 W/(m*k). Also be sure, that your backplate is metal not plastic
4. cover at least the areas of the VRM and VMEM like in this picture (not mine, I just found it)
5. repaste your GPU. Or use these: Thermal Grizzly Kryosheet. But they are a) expensive and b) electronically conductive, so make sure it sits on your gpu and does not touch anything else. But they have a great impact on heat transfer
6. Or, if you have the money, get a Raijintek Morpheus 8069. Add some nice fans to it and it should help you

Ingames:

1. don't use TAA with high settings, that will heat up your mem
2. use the chill feature that is included in the drivers. You limit the frames, therefore your GPU doesn't have to work as hard to get high FPS.
3. Shadows/RTX in games also use a lot of power... seriously.

If your card is reaching 110C, it will start to throttle down to not exceed those temps, the amount it throttle varies based on how much it needs to back down to keep it in the 110C max tjunc temp.

That large of variances is usually due to uneven contact between heatsink and the die. Some of the 7000 series had these issues as well which some people tried to correct with repasting etc, though it made little sense to do that as cards were new and should be RMA'd. GPU at 70C and hotspot at 110C is not normal.

If that 6800xt is out of warranty, you can repaste it and also inspect your cooler and the card itself to see if you're getting any type of bowing (curves) in the PCB, this can cause uneven pressure and a poor mount. Other reasons can be just the cooler is not flat etc.

If you're under 100C on hotspot, it's not ideal but it shouldn't reduce performance. I personally would not be comfortable with a 70C GPU and 100C hotspot, 30C delta is a bit on high side.

It's unlikely that thermal pads alone with contribute such drastic drops, it's likely that in the process, OP was able to better seat the cooler with even pressure distribution which is what you're going for. Do some research but people have gotten pretty good results with ptm7950 sheets as opposed to thermal compounds on GPUs.