The temp gauge acts as you've described and I haven't been great about using the Toyota coolant exclusively.
Answers to your questions inline below;
I'm just trying to bring up possibilities, so don't take my questions as any reflect of your capabilities:
HA! I question my capabilities daily. 
Were you doing any maintenance work prior to this issue starting?
No
Were you loosing any coolant; present or past?
No
Do you get heat from rear heater????
yes - this part questions my "blocked" theory but I think what little fluid is getting through is heading to the rear core
Is reservoir to full mark in morning after full cool down?
I believe so - will recheck
Is radiator coolant to top in radiator? yes
Have you looked into radiator while starting and running engine cold (over night cool-down). You should not see any flow/movement in radiator until operating temp reached?
operates as you've described
Once operating temp reached; put cap on radiator wait 15 min, feel upper radiator. The hose should be very hot with coolant moving through it.
will check
If all checks out I'd:
Blow pressured air or water in heater hose end toward water pump/thermostat.
Will do
If all this checks out I'd pull thermostats and do stove top bench test. While out blow other direction from Pump to heater with heater hose disconnected.
Will do
I'll keep you posted.
Thanks a bunch,
Carl