Automotive gauges are not scientific instruments. They are at best an estimate. The way to use them is to find what is normal for your engine and watch for abnormalities.
The temperature of the casting where the sending unit is should be the same as the water the sending unit is immersed in. That should tell you how far your gauge is off compared to a laser thermometer. It sounds like your engine is not getting up to operating temp while idling.
Sounds like the fan switch is defective to me.
A side note- To determine how well your radiator is cooling, take a laser reading at the thermostat housing and another at the bottom of the radiator. Sounds like you have no problem there but I threw it in for future reference.
