Start with the easy option . Pull the gauge cluster out (fairly easy) and clean contacts than slide it back in . If still no good than check sensor harness connector for possible broken wiring( sometime wire break due to engine vibration).
Does not cost you any money (unless somebody else has to do it for you
).
If temperature gauge still jumps everywhere than replace the temperature sensor.
The onboard computer (PCM) would not impede you to start the engine if the temperature sensor or circuit is faulty. It will just light up the "Check gauges" or "Check engine" light . Can't remember which one exactly.
It is just a coincidence that you starter motor developed a fault in the same time . It is a bastard of a job to change it (at least on the right hand drive diesel xj's ). Measuring resistance does not help in your case because more likely the starter solenoid contacts are not making proper contact anymore to allow current to flow to the starter motor itself. Had the same issue when I bought my XJ.
This are the fixes I can think of....could be wrong but from my experience your symptoms sounds same with the issues I've had some years ago. Cheers