With the engine cold pop the hood and remove your radiator cap. Turn on the car then dump in some 50/50 Coolant/Water mix and see if it drinks it up, if so that should cure you cooling problem. If it doesn't it's possible your Thermostat is messed up.

Oh and seeing how you said when you turn on the heat it goes down. It's possible the relay for your fans is dead making your fans not come on, this could explain why your temp isn't at H. When coolant is low heat usually doesn't even work.