When the valve and thermostat are closed then no coolant is moving at all. It is basically a plug of coolant in the engine behind the thermostat. You need to wait for convection to heat the water directly behind the thermostat before it opens. The gauge is measuring the temp at the back of the head and it is clearly getting hotter faster than the coolant directly behind the thermostat (not surprising).
When the value is open a small amount of coolant is circulated (since the heater hoses bypass the thermostat) and that eliminates the "plug" of water and allows the heated coolant to circulate behind the thermostat. One of the heater ports is generally right behind the thermostat for just this reason.
When eliminating the heater core I never block the ports, but rather put a small loop of hose between the two ports to allow the thermostat to open properly.
