UPDATE: I cleaned and sanded down the connecting surfaces of the harness and sensor. The gauge is now consistent and not dancing around.
I grounded the harness to the ground and the temp gauge shot to 120+
So the gauge works, the temp sender is fine.
The temperature was still at 65-70 on the highway and between 75-80 when I'm idling in a warmer place (a garage).
I guess it's the Thermostat - I wonder if it even has one
Thx for all the help guys