Heater

Sounds like youre on the right track with the thermostat and heater core. First, Id check to see if you have air in the system. Air creates a barrier that the fluid cannot travel past and in turn, not travel to the heater core. Are you low on coolant? Is it leaking coolant? Is coolant level dropping but no visible leak? If yes to the latter, it could be a possible head gasket failure (you may see white smoke coming from exhaust pipes), but I would start with the easy stuff, like the thermostat and checking for air in the system.

I just checked fluid / coolant. It's was good, but there was a brown sludge looking stuff under the cap.

Could be oil. Was there a lot or a little? The oil system is pressurized at a maximum of 100ish psi (when cold..goes down when warm) and the cooling system is about 16psi max. If the head gasket is compromised, the leak will take the path of least resistance whether its into the cylinders, into the oil system, into the cooling system, or leaking outside the block. IF you have a chance, find a shop with a coolant pH test to verify if you are bleeding compression into the cooling system. These tests aren't fool proof but are a good starting point. Another place oil can leak into the cooling jackets is the front timing cover. Any visible leaks around there?