Now my question is if [the CPU being hot versus the average temp of the reset of the MacBook] causes any harm to CPU as I think I read
somewhere that quick fluctuations within a short range in the temp of
CPU can cause damage to the CPU.
Your MacBook will do multiple things to address the CPU temp from throttling (
kernel_task process) the CPU to spinning up the fans (provided you don't have another program overriding the fans' operation).
This has already been addressed on this site: kernel_task hundreds of % CPU yet cpu frequency is being lowered
If your CPU goes past its temperature threshold, it will shut itself down (outside the influence of the OS) in a process aptly named "thermal shutdown."
Apparently , the reason why fans do not speed up is because the system
as a whole is within the safe temp with the only exception of the CPU
temperature as CPU is busy processing all those startup processes. So
the fans assume everything is alright and do not speed up.
The fans assume nothing. They also don't operate on the basis of an mean system temperature. If it (SMC) sees the CPU is too hot and/or under load, the SMC will spin them up unless something (like SMCFanControl) is overriding the default behavior.
If you've ever looked inside a MacBook Pro, the fan which is attached the heatsink covers only two components - the CPU and, the GPU. The SMC isn't going to try to cool the CPU with a fan directly attached to it by waiting until the other temperatures spike.
Instead of looking at iStat, it would be more beneficial to look at Activity Monitor to see what the CPU is doing. Try running in Safe Mode (hold Shift while booting) Recovery Mode, or booting from an external disk with El Capitan or Sierra installed. If the problem goes away, the issue is with High Sierra, not your MacBook.