1998 Mercury Sable

Where is the thermostat? This is the strangest cooling system I've ever encountered.

Does the coolant reservoir cap also serve as the "radiator" cap?

I think we have a leak in the reservoir cap, which makes it run low in antifreeze, which, in turn, makes it run hot.

While running, the temp gauge goes up to hot for 2 - 3 seconds then back down to normal repeatedly. There is no warm air going to interior heating system.

Sometimes, not always, filling up the reservoir makes the interior heat work.