coolant system advice

Engine Cold.
open the expansion tank.
tie Latex Glove over the expansion tank hole tightly.
Start car.
Quickly from under the hood raise the RPM to 3000 for 30-45 seconds if the glove inflates bad head gasket after 45 seconds the gole will start to inflate normally...

If you are running the engine and it is up to temp, do your water hoses expand and are Ballooned and hard to Squeeze, Bad head Gasket.
If you have a oily ring in the expansion tank, Bad Head Gasket.
If you are leaking oil out between the 3rd and 4th cylinder in the front, yep Bad Head Gasket.

On gassers with the water cooled oil cooler on the oil filter flange, this could also be a sign that it is a bad oil cooler and that is a whole lot easier to change out first to eliminate the possibility of a bad head gasket or bad oil cooler.

Make sure that your radiator fan switch is working and that the fan relay and fuse are good to go. Then address the issue of the separate ground wire to the fan motor, as the Fan is using an isolated ground unlike a lot of American cars, the fan shroud isn't grounded as it is into plastic on most models and that is why it is imperative that your ground is good to the motor.

If you jumper 12V+ to the motor and ground from the battery, it should spin..... If it is a 2 speed fan do both red/white wires to ground separately and you should see two distinct speeds.

The Radiator Fan switch is the heart of the relay system as it turns the relay on or off. See Chris's wiring to understand it IIRC it starts at page 72 of section 1.

Moisture around the head well using a UV light check all hoses and flanges, as if an o-ring holes or flattens out you can get a fine mist of spray that is hard to see, I had a WP do that on my Van until it finally gave up when I was out of town, and had to change it out...

The old Green Prestone type of coolant shines up under UV and the UV light as well as a pressure tester for cold engines and the Expansion system is another tool to have in your chest for a rainy day as you may use it once or twice in ten years, but it does make short work of diagnosis.

Now I will tell you from past experiences with a diesel on a hill they do tend to get overly hot on the climbs but it seems that the fan will keep the temps moderated....but I have seen it climb almost to the hot mark, but I too noticed that on the down hill it cools rather quickly, and if you get behind a car on the climb it interrupts the forced air over the radiator making it work harder...

In 300+Kmiles of ownership I only went through 1 water pump.... and it wasn't unusual for the Car to do a 1500 mile week end trip. The Best thing that ever happened to me was the fact that at 20114 miles the oem radiator split the core from the Tank because of the stupid Clip mount and bolting fast to the frame at the bottom allowing it to vibrate and torsion shear...That issue was resolved with the purchase of a Brass and Copper Radiator that for the next 19 years of ownership and a few bad head gaskets never failed on me at all.

On my current Cabriolet I have had to buy a new radiator, and opted for the totally Aluminum one as a replacement, even though they hard mount at the top and bottom on a Cabby, which I suggest that it should be done on the golf/rabbit I have noticed that it cools things better. Yes I bought the plastic and aluminum one after about 2 months of ownership 12-to-15 years ago I opted for a better version. I did have to grind off the fan mounts on the front of it so the radiator wouldn't touch my condenser.... when that goes again I will change it out for a parallel flow type that the newer cars use as it is more efficient than the circle the wagons one we currently use for the r12 systems of old...

The fan circuit in a MK1 cannot be trusted for long run times like climbing a mountain. Many fuse panels have that fuse (and near area) semi-melted from heat.
I tapped into the hot wire to the radiator fan and have a relay (direct from the battery with a fuse) operated with a manual switch in the cab. It actually makes the fan run a little faster than the factory wiring. Going up a grade I'll hit the switch and leave it on till the climb is done.

I also tap a smaller wire into the same main wire to the radiator fan and run to a small indicator light somewhere easily visible on the dash. Lets you know when the radiator fan is getting power while you're driving. It's kinda weird, but I want to know if that fan is getting power when it's supposed to. If it's not - I go to the manual switch, if that doesn't work, better pull over and have a look.