If the temp gauge stopped working at the same time that you replaced the tstat, possible there is an air pocket in the system. Good idea to make sure all air is bled out since this will also cause overheat if the pocket is large. Another possibility is that the wire got pulled off the gauge sender (at front of cylinder head just ahead of #1 glow plug) if the wiring harness that runs near the tstat housing got moved during the work.
90 degree tstat would be a little warmer than stock, 87C is the OE temp. 3C might be enough to make a visible difference on the gauge, these are quite sensitive. If the car had no thermostat installed when you got it, that's a clue that the warm running you are noticing was going on for a previous owner too. The plugged radiator could have been a cause, good that you found that and fixed it.
I would start by checking the electrical connections to the temp gauge sender and making sure the cooling system is well burped, then see what happens. First of all you need the gauge to work. If all the wiring appears OK, you can test the circuit and the gauge by grounding the connector for the sender. The gauge should read full hot with this wire grounded. If it does but you still get no reading when it is connected to the sender, then the sender is the issue (rare). If you get no reading when the wire is grounded, then the issue is with the gauge/cluster (rare) or a wiring connection somewhere between the engine and the dash (common). If you get to this point with no clear answers, reply back here and we can give some tips on further steps.
One factor with your 1983 model is that your temperature gauge shows variations in temperature around the operating set point. 700 series Volvos from late 1984 onward introduced "damped" dummy-style temperature gauges where the needle stays right in the middle for any temperature relatively close to operating temp, roughly 180F-210F. With those later gauges, the only time you see it move up is after a problem is already happening, so the early warning an accurate gauge provides is lost. On your gauge you will see minor fluctuations that are normal. An extra few degrees of operating temp might be visible with a hot thermostat, which the later style gauge would hide.
A few of us have had success running slightly cooler thermostats for improving temperature control in hot weather. If other checks don't turn up obvious problems this could be something to try.
As others suggested - if the car sat 10 years be sure to replace the timing belt.
