What i'm saying is the facts dont make any sense?
IE the engine when left idling while stationary will get hotter, not cooler. The only two things that i can think of that could cause that, is an airlock forming around the temp sensor, so the sensor is reading nothing, or the stat being stuck open AND the fan managing to cool the engine down enough to lower the temp to 50c.
When our stat was gone the only time it would reach 90c was when idling in traffic or similar, if we were moving at all it would quickly drop and high speed motorway driving would see it drop all the way to 65ish.
You say the fan runs all the time, isnt it viscous coupled? ie it will run all the time? It is on the B5 anyway. If the VC is working you should be able to stop the fan with your hand with the engine at normal temp (although dont stick your hand in it incase its broken, use something else)
So either the guage is lying, or the stat is stuck open AND the rad fan is somehow managing to keep the engine cold (which is unlikely, but possible i guess?)
You need to find the source of your water leak, i think its far more likely you've got a leak and its introducing airlocks into the system, when accellerating the raised RPM might be managing to shift some of them and actually circulate water round the heater matrix properly.
Heres what i'd do, ensure the water is full, drive the car around for 10mins to get it warm then park, leaving the engine running, open the bonnet and feel the rad hoses (both of them), they should be hot, and firmish. If they're still soggy the system isnt pressurising, and its probably spraying water out the leak, have a look round the engine, listen for hissing and see if you can see crystalised antifreeze anywhere. Also compare the dash temp with the temp of the hoses, 50c is just about holdable, 90c is "owch thats fricking roasting"
See what you come up with.