2000 ML430 Coolant Temp.

I have a 2000 ML430 and the temp in chicago is about 20 degreeF. I have noticed the coolant temp gauge fluctuate between a little below the 80 mark to abouth 90mark. (77degreeC to 88degreeC). Is that the way it should be? Or is my thermostat bad? Also, I set the climate control temp dial to the middle and it blows out super hot air for ~5minutes after the car has warmed up, then it gradually goes to cold air, and i have to start turning the dial to the right.... is that the way it is too? Please advise....