>no abnormal water pump noises
>no coolant backup into overflow tank
>coolant has been changed frequently over the life of the bus
>turning on heater significantly reduces engine temp (almost back to normal)
>no external signs of head gasket leaks
>fan temp switch and temp gauge both concur that the engine is hot
>(functioning seems correct)
>rear passenger heater air does not seem very hot, even when engine is
>definitely hot
>
>Any guesses as to what's going on here?

guesses, sure... maybe a dying water pump, yes no noise, but maybe blades on 
the impellor are all corroded away.  The rear heater should blast out the 
heat, that's wierd, sounds like a circulation problem, my '87 Syncro creeps 
up in temp at standing idle, but front heater temp output actually goes 
down.  I have to rev the engine to push hot coolant up to front heater in 
winter/parked@idle or I start blowing very cold air. But rear heater always 
warm at idle due to shorter pipes thus less flow constriction. I have NO 
idea how to check a pump.  Maybe as a partial measure do a system flush???  
Sounds like you've looked after it well, maybe the pump is plumb wore out.  
Happened on my '85 in'90 and on my '82 Rabbit also.   tim