If the limiter was the problem the temp gauge would read way wrong too.
If the wire from the sender should be shorted to ground in the trunk floor or behind the left kick panel ( common places for faults ) the gauge wouldn't live very long.
If the needle moves but always to the wrong place the gauge or the sender is at fault but not the wiring.
My best guess is the sender being your initial problem.
A new sender may not cure it though since a bimetal strip inside the gauge is being overheated ( per your pic ) by a faulty sender. Once that bimetal has a bow in it at room temperature, ( see pic below ), it's fecked. It wont respond and move the needle properly.
As bad as that gauge looks, it was working, just not very well.