There's two temp senders. A Black one, which on an early car usually has only 1 wire to it, which drives the engine ECU and is what the OBD is reporting, and a green one with two wires that drives the temperature gauge via the BeCM. Short out the plug to the green one and see if the gauge rises to the hot position. It's damped so will take a little while.

When you say short ?

Just connect one pin to the other with a bit of wire.

The obd is reading so does that mean the thermostat will still work like it should ?

Yes and yes. OBD is showing the correct temperature, it's just the gauge that may not be. Although the gauge only covers a very short range so it may not be getting hot enough to register. The gauge tends to only read between 80 and 120 degrees.

Hoses are 6mm ID and, other than getting a replacement through the bulkhead and getting your hands onto the brake pedal switch (not a lot of room), simple enough to replace.

I can only add to what you have patient and wonderfully described, that the best way to sort most definitively the perishing hose issue is to get silicon hose - expensive, and unfortunately mostly "blue", but endures the heat perfectly.
Be careful when you mess around with the brake switch - it likes to break off easily, or in any case to become stupid and throw an error in the ABS/ETC system, requiring diagnostic software to reset.