Help! Polo Vivo 'Overheating'

Guys some advice please, a bit of a long story....
My sister bought a 'demo' Polo Vivo 1.4 in 2013 (i think, don't have the reg doc s with me, they're with my son), apparently a 2012 model with only 3000 k's on the clock.
Her son/my nephew drives it, varsity and back, for 5 odd years. Puts about 80 thou on the clock, it goes to VW agent where she bought it from for all its regular services. Then he decides to head overseas and (because I know the 'history') my son buys it from my sister.
When I come to give it a service I notice the coolant is pretty brown. Anyway it wasn't low, so my son drives it. We do a couple of services (at home) along the way.
But the car starts developing a weird fault, it starts overheating (on the open highway), and the fan comes on. Temp goes up to about 120, and the warning light comes on.
So I think sludge in the system, I get a can of engine flush, drain, fresh water hose through the system, button it up, (put a new catch bottle because the other was brown/murky) let the flush & coolant circulate for about 1/2 hour, drain, water hose, new coolant, bleed the system; think problem solved, off he goes. No such luck.
Think maybe the thermostats are blocked up, so put new ones in (it's one housing). Decide to put a new waterpump at the same time. Notice that there is a lot of 'gunk' in the water passages. Fill, bleed (a bit difficult, have to slightly pressurise the reservoir bottle to start it flowing), off he goes. No luck. Decide (now my son is throwing away his hard earned bucks and is none too pleased) to replace the radiator. Now the fun begins....
When I pull the panels off to get to the radiator/s I notice a couple of mounting tabs on plastic bits broken/missing. When I pull the bumper off I see a great big ding in the square tube cross member just behind the bumper. The car has been in a prang. The outside bodywork looks perfect, but 'under the skin' there are obvious signs of it. Neither my sister/nephew ever crashed this car, and neither did my son. It would have been so obvious becaue it would've had to be an insurance claim. Anyway I replace the radiator and the temp sensor, off he goes. Same problem.
So I get my mate with his VW software to come around. We run a scan (interestingly we find a 'airbag' code...), clear them, then run the programme with the car on.
The temp in the software matches the temp gauge in the car. But, and here's the crux of the matter, the engine gets hot but the radiator not (block 110 degrees, radiator and 'cab' radiator with heater on, stay at about 60 degrees, measured with a laser temp gauge) . When the fan comes on (it blows the correct way I checked) the air coming off it is cold. But the motor is super hot. As is my son under his collar.
So I decide to do another flush, but this time he's driving the car for a week to get the best out of it, I will do the replace coolant/rinse out motor this coming weekend. When he's gone my mate says to me the car has been data dotted, the motor has been replaced (we think, could have been dotted for some other reason) and the 2nd hand motor which was put in had never had coolant in it, and was rusting inside. Also who knows how many k's or what its history was. But we cannot trust this thing. So far, touch wood, the head is still straight, no evidence of coolant in the oil, and she doesn't lose coolant.
So some advice, some answers please.
How do I flush all the rust/gunge out of this car?
If we can't win, do VW still do 'factory reconditioned/ motors (they used to)? Cost? Not sure I want to trust a 2nd hand motor.... Its a lekka little car, suits him down to the ground.
Is it possible to see if this vehicle has been 'written off' just by the VIN. And also to see if the motor was replaced, and when that was done/data dotted. I don't have the license docs with me, but I have a pic of the disc.
Also a pic of the inside of the old thermostat.
Shot, appreciate in advance.