Bob RTE to the rescue!
Sounds to me like the heater matrix may be partially blocked.
Does the temperature gauge read between 1/4 and 1/2 when warmed up?
Does the radiator cooling fan cut in when idling and hot?
Do BOTH the hoses to the heater get hot? or just one of them?
Answers on a postcard to the usual forum.
Bob RTE
PS: if you turn the little knobby thingy on the heater control panel to cold, does the heater get colder? - if so, its not the little knobby thingy.
PPS: The expansion bottle serves 3 purposes.
1. To allow for the expansion of the coolant when it gets hot.
2. A cap to maintain or release excessive pressure
3. It de-gasses the cooling system (self bleeding)
Hope that helps.