Ok, I heated up the temperature sender and measured it with my multimeter by touching one contact to each end of the sender (hope I did this correctly - like I said I'm a noob at this electrical stuff). Here are my results:

60C - 137 (should be 110)
80C - 63 (should be 67)
90C - 50 (should be 51)
100C - 40 (should be 38)

Except for the 60C reading, it looks to me like the sender is functioning correctly. Therefore I assume that I can rule out a faulty sender?

I replaced the thermostat-to-head gasket and re-situated and tightened the clamp on that short section of hose, so hopefully that will take care of the couple of small leaks.

At this point I guess all that remains is for me to check the ground at the gauge?? I'm still concerned that she ran right around 100C both when driving at 70 mph and when driving around town at 40 or so. The thing is, she stays nice and cool (85-90C) until you shut her off for a few minutes. Then when you restart her the gauge is well over 100. It comes down quickly to 95-100C but never seems to get back down to the 85C temp that she had before turning her off the first time. Is this just a normal thing that I should accept? One of the reasons I'm concerned is that we're headed to the Rockies in a couple of weeks and I REALLY don't want to mess with an overheating car...