Well, there's one problem......."I cannot tell what temps.....etc."
Dash gauges are notoriously WRONG, and/or the span shows a temp between 120 and 240......so we're supposed to
"Guess" what the temp is when the needle is between the two lines?? Hello????
Go to Wallymart and get a cheep meat thermometer........and stick it in the radiator when the engine gets up to temperature....(actually before, so you don't burn anything off getting the cap off)
It's the ONLY......ONLY way you're gonna know exactly what temperature it's running at ! ! ! !
It seems odd that the upper hose has no fluid running through it, with the engine at temperature, so the fact that the hose is "soft" may only indicate that no pressure is being built up in the system..........for that I would say there could be a problem with the radiator CAP not holding pressure. Hmmmmmmmm........
But, as you say, it's not overheating now, so if it's running correctly, and maintaining the recommended thermostat temperature, any lack of heat from the heater core could be due to - clogged core - bad control valve - or other items like closed vent doors, bad vacuum line to heater, etc., etc., .............
One last note, make sure the heater is FULL ON, and check to see if both hoses going TO and coming FROM the heater core are hot.........if not, there's no circulation....for some reason.