Cooling system problems - tearing my hair out!

I have a 1.4 16V AFH engine, using a top fill mk1 golf radiator and fan.

It seems I have multiple problems, in a system I thought I understood and is quite simple!

The temp gauge works as it should, as the engine heats up the top rad hose gets hot quite quickly and the bottom one is cold for a while, after running for a good few minutes the bottom one will get hot too - by this point the temp gauge has the needle pointing directly up (I'm not sure if it's meant to get that hot, is the needle supposed to stay in the box to the left?!) - the radiator doesn't kick in and the blowers in the car aren't providing heat.

I've just fitted a new radiator switch thinking that was the problem but it's done nothing to help - when the switch wires are connected the fan spins up so I don't understand how the radiator pipes can be getting hot but the switch isn't engaging…

I'm not sure what checks or methods to put in place to work out where my problem is, it seems when I solve something it just breaks something else!
 

Mk1 temp gauges can rise to 3/4 and everything is still fine - although with you having a replacement engine did you match the temperature sender to have the same impedance as the clocks expect ?

The fan circuit arrangement is very simple +12volts to one side of the fan, the other side connected to the temperature sensor switch and that connect to ground. When a certain temperature is reached the switch closes and connects the fan to ground. Get a multimeter and test that you have 12volts on one side of the fan connector (ignition on). You can also short out the two pins of the sensor switch to simulate temperature reached, keep your fingers away from the fan though !

Depending on the way your heater matrix pipes are connected, if they are high up ive heard people have problems with them trapping air. Also, maybe the matrix could be blocked?

The temp gauge sounds fine, if it gets into the far right section you need to start worrying but 1/2 way is where mine always sits  

leave it running for a while stationary and see if the fan kicks in then

sounds perfect to me chap, 1/2 is normal operating temp and fan shouldn't kick in till gauge gets to about 3/4.

for the heaters check the heater valve is actually open when you set heaters to hot, plus you need to make sure its open when you bleed the system