An update.
I thought, with summer on the way I'd go belt and braces.
I found the new stat was opening too late, so I sourced another cooler 82C one. Tested it and it open much earlier than the other one.
I also bought a new Rad, at £50 its cheaper than a headgasket!, I also flushed the system and added a 50/50 mix of coolant.
cleaned the original temp sender and the connector, bled it, and went for a spin. Driving around the guage still sits at just over 3/4, which is the same as my new non vw one. I went for a fairly hard drive for 10mins or so and then slowed it down a mile before home. The highest the oil temp went was 95C, and if I coasted down a 1 mile hill the oil dropped to 91C quite quickly and the guage went to just under 3/4.
Resumed normal driving to my street and the oil was 94/95 and guage just over 3/4. Idled for 2 mins and the guage went to the top and the fan came on. The switch for the fan looks quite new as well.
So I'm thinking the oil temp is what to go by, and if I clean and renew all the earths to the engine, possibly get a VW genuine sender, if its still the same stop worrying(?)
After 5 mins I stuck my fingers through the grill and I could feel warmth close to the rad, but not what I would consider cooking or even hot.
Opinions? I'm paranoid about not knowing exactly whats happening with the engine.
Cheers,
Stu