The coolant gets cooled by passing through the radiator and air passing through the radiator absorbs the heat from the water.
I would stay away from that Kit and most kits in general. The won't give you the performance over a good heatsink, and that kit won't have the headroom for a gpu block without havy rise in temps.
Check out www.dangerden.com
for a nice selection of high quality parts.
I know it's a little higher then your budget but I would spring for the :
TDX and D5 pump combo
black ice pro 2 radiator
10 feet of clearflex tubing
and a T line
later on you can add a gpu block when you get the money of if you want to go for one now the Maze4 gpu is really nice.