That is normal.
'The levels seem to vary up to 2 inches in the over flow'
depends on the temperature of the coolant, therefore there is the expansion tank.
'Oh a is that hose at the top of the coolant overflow a boil over?"
the cap of the expansion tank has a pressure relieve valve. That is to avoid overpressure. I would recommend to change the cap in regular intervals, for example very few years. There was also a recall on defective caps.
Yes, there is also this overflow connection next to the cap on the expansion tank. That drops down under the car.
Best way to test:
in your garage or parking lot, every morning after the engine cooled down for several hours completely and the car is in the same position. Not in different place. The lower part of the expansion tank is the white/milky plastic, there you can see the level without remocing the cap, there is also a mark for the normal level. Have a close look at that.