jimbo88,
Unless you let the water mixed with the coolant in your system was allowed to sit out for a few hours, it will have air dissolved under the pressure of your water lines. This air will be released from the water for a period of time and will appear even if it looks like you have it all out. Remember the bubbles from nowhere in the old waterbed, or the bubbles that form in the ice cubes. So it is very important that you keep checking the level in your expansion tank since the cooling system will drink coolant during the period it takes to release all of the air that was in the city water. As for any tubing above the radiator cap, this is common. One reason to turn your heater on high is to obtain coolant flow through it. The movement of the water "entrains" the air and carries it through the system. As the coolant flows though the radiator, its flow slows due to the larger cross sectional area. This causes some of the air to escape the entrapment and float up to the radiator cap, thus purged on following cycles. Finally purging the complete system over time. Now some systems have had design flaws, but I do not believe your vehicle is one of them.
Regards,
C5Phil