It is probably due to the physical location of the cities. On the west coast, cities by the ocean typically tend to stay cooler than those cities inland.
You are correct. Scotts Valley, which is about a 10-20 minute drive from Santa Cruz, often has dramatically higher temperatures than Watsonville or Santa Cruz.
Another thing I find strange about my IS is that none of the HiRAD locations ever report fog. Only the airports do (Watsonville, Monterey, Salinas).