Passat (B5) :: Only Get Lukewarm Air From Heater

It's getting cold here in New England so my heater has decided to act up. I only get lukewarm air from the heater. The engine warms up in the same time it always has and the coolant temp gauge stays right in the middle at 12 o'clock. No overheating. So I think the thermostat and water pump are OK. I tried turning the heater temperature control from low to high and I can hear the blend door open and close. So at least the blend door motor isn't dead.

There's a definite difference in temperature between the inlet and outlet hoses to the heater core (based on how long I can hold my fingers on the metal hose clamps for the two hoses). I disconnected the two hoses and flushed the heater core. I mixed up some Prestone Radiator Flush with boiling water, poured it in, and let it sit for 40 minutes. Some particulate crud came out but not a lot. Rinsed and repeated in backflush direction. Somewhat more crud but still not a lot. I reconnected the hoses and not much has changed--still just lukewarm air.

To bleed the system I elevated the plastic coolant tank and pulled back the return hose to open the bleed hole in the hose by the firewall.

How much of a temperature difference should I expect between the heater inlet and outlet hoses? Do I need to improve my bleed procedure? Is there a coolant control valve in this system or does the coolant flow at max volume all the time?

BTW, I ended up adding about 44 ozs of water and G12 to what was already in the system. There must have been some air in the system because the coolant level was just a touch below the MIN line at the beginning. I've also noticed when it's rainy or cool/humid there's some vapor coming from the radiator (not heater) area. I'm wondering if I have a slow radiator leak and that's allowed some water/G12 to escape. But even after adding the 44 ozs I still don't get hot air from the system.