1 - Your gage wiring sounds right (at least I'd wire it up the same way you did...)
2 - If you disconnect the wire at the sender and turn on the ignition the gage should read "E". If it still pegs at "F", the wire between the gage and the sender has a short to ground.
3 - The gage sender works like a variable resistor exactly as you describe. You can quickly check the resistance of the sender with a multimeter. And the electrical manual for your machine should give the range of resistance readings (full and empty resistance) for a good sender. If you find the sender resistance is too low, it's time for a new sender!
4 - Most automotive gages are "voltage compensated". Ie the gage reading does not change with changes in system voltage. Typically a gage will remain accurate with system voltage anywhere between about 5 and 16 volts.
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Today's Featured Article - Gettin My Old Tractor Home - by Clayton Sweeney. My name is Clayton Sweeney. I am from Southern Maryland in a small town called Lothian. I am 20 and my father and I are the proud owner of a 1954 Allis Chalmers WD-45. When I was 18, I dated a girl in the next county over. Her family are tobacco farmers. It was a cold Thanksgiving evening, and we were going up to her Grandparents house. As we passed one of their barns, I noticed something orange in the corner of my eye in this old shed. It was pretty dark and I asked what it was
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