does cap on overflow tank for radiator need to be tightened all the way

Nope ... there is a vent hose on the side of the tank so even if it's tight it would not make a differnce

Try rotating the directional knob back and forth ... that knob directs the vents that are vacuum controlled ... sometimes the O rings get flat that are inside the knob and it doesn't open the heat

The overflow tank's contents just fills and empties with the requirements of the cooling system- the cap should be tight- check the rest of your cooling system- it is a closed system- maybe you have a leak? there should be no air bubbles unless you had work done recently- the moving gauge should be a concern because you can't tell how hot your engine is running-