Hey Mike,
That is common with yj's. I found by flushing my heater core with tap pressure and water, then flushing the system, then replacing coolant 50/50 (glycol/distilled water), the heater temps will be more constant and a lot hotter, and you won't get such an erratic fluctuation. I do this every fall. Make sure ya use distilled water, because the minerals in tap water can scale up your rad, heater core, water pump, and everything else in the system, and cause the same problems again very shortly. Old contaminated coolant can really gel up the rad and heater core, especially with mineral scale. You'll have major arctic highs blown' out the heat vent's while your engine is overheating.
As long as the coolant's circulating properly and there's no air in the system, the head & block will be fine. I would check the coolant level and do a flush (really wash out the heater core), this should clear up a lot of the heating and fluctuation problems you've been havn'
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