Fan thermostat switch controls the temperature at which the radiator fan will turn on usually around 85C. When coolant temperature reaches 85C it will automatically turn radiator fan on.
Thermostat valve controls flow of coolant into radiator. When the engine is cold, thermostat value is closed and coolant can only circulate within the engine block. When the coolant temperature reaches optimum engine operating temperature, the valve will open and allow coolant to flow through the radiator. The thermostat valve also has a temperature rating at which it opens.
In a normally operating engine, coolant temperature remains between 90 and 100C. If temperature gauge is just below the half mark or near the half mark, then its fine. If it goes higher than the half mark or goes much below it, then you have a problem.
In your case, you say, temperature gauge reads close to C on the highway, then it means, that your thermostat valve is definitely bad. It should close when engine temperature drops below operating, but in your case it is not closing. The radiator fan switch could also possibly be bad. But you should replace the thermostat valve first and check if the problem is fixed.