Most likely cause is a failed engine thermostat.
Temperature gauge may drop when heater turned on because additional coolant from heater core is introduced to cooling system - usually this coolant is cooler than what is currently circulating
Over temperature warning.
yes it can
Engine is overheating, faulty gauge, faulty temp sensor......
A short between the heater switch and temperature gauge.
In the middle (about 195 degrees).
Thermostat probably needs to be replaced.
I very much doubt it.
Turn on your vehicle's heater
Broken thermostat. Common Chrysler problem. Replace the thermostat.
It's most likely the sending unit. have your mech check that for you.
Make sure all of the wires on the coil are tight and if they are take it to a speedo shop for tach repair.