I didn't read all the thread, but my gauge also rarely passes the middle mark (only when serious overheating took place, i mean, damage)
once I took the dash apart and studied the temp gauge.
it has three wires: ground, regulated 10v and signal input.
the sender connects here, the gauge is a simple resistor that heats when current flows, as the sender is a NTC, more heat=more current=more heat on the sender. a bimetal link gets distorted by that heat->needle moves following the metal.
there is also a circuit that drives the LED when voltage gets below 4.1V (if I remember correctly) that voltage corresponds to a given temperature in the head.
so far so good, but VW also wanted to fit the dreaded "low coolant" light :x
they put another sender in the coolant expansion tank and a circuit to interpret it (looks like a relay, #42 if I recall correctly). the output of that relay is a fast pulse, a short to ground in the same wire as the temp sender.
what it does is that the LED blinks but the gauge doesn't move because the pulse is too fast for it to react.
very nice, but now we get an old complicated system that tells us that the water is too hot, or we have no water.. when it works properly