As far as the temp gauge goes, the difference is in the sender. There are two types of senders: analog for gauge, and what might be thought of as "binary" because it is just on/off for the temperature warning light. The behavior of your gauge (going from one extreme to the other) seems to indicate you have the sender for the warning light.
Using a multimeter set to resistance (ohms), measure the resistance between the terminal on the sender and ground, which in this case could be the head next to the sender. Just be sure the probe scratches through any paint, rust, grease, etc. Measure the resistance at key off, key on/engine off, and key on/engine on. BE SURE to watch your multimeter leads as the engine fan and accessories rotate. Monitor the measurement as engine approaches operating temp. If resistance never changes, or changes abruptly at some point during engine operation, you have the warning light sender. If the resistance slowly changes as engine approaches operating temperature, you have the analog sender for the gauge. Inspect your wiring, referencing a wiring diagram in a service manual.