Strange cooling issue. please help

[240wat]

So I have a s14 ka swapped into an s13 coupe. Everything seemed to be fine after test driving it. After a couple days I noticed the temp gauge reading rather low and my gas mileage was horrible. I was told that chances are my thermostat was stuck open. So I ordered a Nismo thermostat and ever since that has been in my car my temp gauge doesnt move up. Today was the first time I saw it go up at all but it only made it to the "C" mark on the temp gauge. This was while cruising on the highway. Once I got off the highway the temp gauge dropped back down to the pin.

My gas mileage still sucks.
My heat is not that hot while driving. At idle it seems to be the hottest.
I'm running a stock KA with OEM clutch fan and fan shroud. Also on the stock radiator.

I have bled the shit out of the system for the past 3 days. Every time I try to bleed the system, I notice my lower radiator hose is cold and my upper one is burning hot. If I pump the lower hose with my hand a few times, the hose starts to warm up and seems like I'm burping more air out. I have checked again and again for leaks in the system and cant find anything. Rechecked every last hose clamp multiple times to make sure they are tight too.

So... after some searching I found how much of a pain it is on KA's getting air out of the cooling system. Is this problem a result of having air in my system still or is my stock gauge just reading super low because I have a nismo thermostat?

I'm starting to get frustrated with this, I have never had an issue like this on any of my cars before.