hi, the temp gauge going up and down is normal, usually a oil level indicator.
the lack of hot air is probably down to low coolant level. The caps are famous for opening to soon allowing steam (and hence water) to escape.
Check the level when cold. if its low, top it up, then look for bleed screws on the coolant pipes, open these one at a time until water comes out, keep topping up the bottle. then run the engine with the bottle top off and give the rad hose a squeeze or ten. once it gets near warm, replace the cap and take for a drive.
see how it goes, you may have to go through the bleed again