If the temperature gauge goes up fairly quickly after starting to a point well above normal operating temperature - and then drops back down to normal, that is a symptom of a "sticky" thermostat.
It will steadily get more sticky, and puts some stress on the engine. Better to go with a replacement thermostat.
But remember, this is an Internet diagnosis - I can't really see what you are referring to - only what has happened to me on other vehicles.
Where is the coolant leaking from on the expansion tank? Is it an overflow out the top? Or one of the pipes leaking?
1982 300D at 351K miles
1984 300SD at 217K miles
1987 300D at 370K miles