BMCC wrote:as the stat would have to open to allow hot coolant into the heater matrix AFAIK.
Coolant flows through the heater matrix whether the stat is open or closed.
I'm with Phil on this one; you know you have a coolant leak so start there and fix that, then bleed the system. If the level had dropped low enough that the top hose was empty, there almost certainly will be air in the system.
If that's not sorted it, then run the engine up from cold with the rad cap off and see if water is flowing through your rad straight away. If it is then your thermostat is stuck open - change it and re-bleed the system. Instructions are in the service manual and it is an easy job, just make sure you check the new one is the right size - see the pics in the link on Kris's thread and you'll see one pic showing a small and big size. Make sure you fit the right size for your car. If you put the small one in and you can push it a long way up inside the housing, that's the wrong one and you need the bigger thermostat. It should sit pretty much on the outside of the housing.
If water isn't running through your rad straight away, then check the gauge sender unit. You'll need a multimeter measuring resistance. Think the relevant resistance readings are in the service manual somewhere but not sure. If you get to that stage and can't find them, post back on here and I'm sure one of the rest of us will pop out and measure our cars for you.