I'd say the coolant is low, or you have air in the system. I know cherokees have a different cooling system. No cap on the radiator, but only on the overflow bottle? I remember reading a lot about Cherokee guys having issues like this.
I'd look for a bleed screw somewhere on the engine side of the thermostat, or start it with the cap off, and let it get warm. Keep the heat on high and add coolant once the thermostat opens and the level suddenly drops. Then I let the temperature stabilize after adding the new cold coolant. Once I know the thermostat is still open, I throttle it up a little by hand which usually drops the level slightly. I top it off with coolant with the R's up a little and put the cap back on.
But like stated earlier, a partially clogged heater core could also be the problem as well. The water pump pushes coolant harder with rpm, and can force it's way through a clumped up core. My opinion is based on the coolant leak you have.
