I've been around and around on the cooling systems on these engines, trying to make them run at the right temp. My '83 764 TD (same year and setup as yours) runs hot on hills, and even just around town if I hammer it from stop light to stop light I can see the gauge walk up from 9:00 to 10:00. I've put thermostats in it; I've replaced the water pump; I've checked and rechecked the headgasket (which I know is new on yours anyway), I've fooled around with cam and pump timing; I've tried restricting flow in the the hoses to the oil cooler, heater and cold start thermostat in an effort to force more flow through the rad... all of that has had no effect. I believe a plugged radiator is probably the only thing left that it could be.
The only D24T I have owned so far that really has zero cooling issues is my '85 745 that I put a different motor in over the summer. It's a good motor with a good head gasket, and I installed a good (aka non-GMB-style with big impeller) water pump in it, along with a brand new Nissens radiator and a new OEM Volvo thermostat. The thermostat was in a Volvo box but it said Wahler on it and looked identical to the Wahler t-stat I can get through IMC for the D24/T, so as far as I can tell it is exactly the same... BUT, the car with the thermostat that came out of the Volvo box never budges the gauge even if I leave my foot pressed to the floor for a solid five minutes straight climbing Rainy Pass, whereas the 764 with the t-stat out of the Wahler box quickly creeps up to the red if I do the same thing. The difference could only be either the thermostat, or the radiator, which is new in the wagon and older/suspect in the sedan. But the key point to this story is that the only car that I have been confident is really, truly trouble-free is the one where I pretty much just replaced EVERYTHING in the entire cooling system. That made it happy. I think these cars have a fairly narrow margin of cooling capacity, where it has just enough to keep it cool even in extreme conditions if everything is working perfectly, but as soon as one component starts to get compromised you can start to see cooling issues come up. They just don't seem to be tolerant of much neglect in that area.
ALSO, though, the temp gauge logic changed in the '84+ cars. The '83s had a non-compensated temperature gauge circuits, while after '84 it used a compensator. In essence, that means that the gauge on an '83 760 is telling you exactly what the sender in the motor sees, while the gauge in the '85 is giving me an approximation that may be ironing out small fluctuations in temp, etc. Essentially the compensated gauge in the '85 makes me believe that the engine gets up to temp faster and stays more stable, while the '83 makes me worry more but maybe is the one that's telling me the real truth.
Any engine will fluctuate somewhat in temp as load and ambient conditions vary, and most modern cars have some degree of damping or compensation in the temp gauge circuit to keep nervous drivers from freaking out when they observe normal temp variation on the gauge. In fact that's part of the big disaster that Ford is dealing with on the 6.0L Powerstroke engines, which have cooling system issues that can cause a sudden overheat... but they put too much damping into the gauge, so if the engine overheats fast enough, it can actually get hot enough to damage itself before the gauge even registers and alerts the driver to what's going on so he can pull off an do something about it.
In any case, on the '83 D24T, it should be pretty steady and the head should probably not be getting that hot, so you may have a blocked rad or air pocket or other impediment to proper flow... but just because you see a little bit of normal movement on the gauge when driving wouldn't necessarily make me think there was a major problem, as long as it never moved too high or too dramatically.