Rick, I've got an instrument background as well.
I just finished a nice 6-paragraph response, and deleted it before posting, after seeing the link that Dave D posted.
I'll clarify something on that drawing. Where they show the cold junction, that means the wires coming from the gauge are copper. Wherever the thermocouple wires end becomes the cold junction. I don't particularly care for that design, for reasons you've already discovered.
Some automotive gauges, like VDO, run thermocouple extension wire (it has electrical characteristics similar to thermocouple wire) all the way to the gauge. I'm sure they also use a fixed cold-junction temperature, but the cold junction is now moved to the gauge, where I think the temperatures are less likely to vary as much as underhood temperatures, if that's where the cold junction is.
Some gauges use "transmitters. " If anyone knows whether or not the transmitters use a fixed cold-junction temperature, I'd appreciate the information.
You see, thermocouples don't generate voltage based solely on temperature. They tell the difference in temperatures between the hot and cold junctions. You have to know what the cold junction temperature is in order to calculate the hot junction temperature accurately. I'm sure the automotive gauge manufacturers saved a few bucks by assuming the temperature was 70 rather than actually measuring it and performing the calculation.
Hope this helps.
Jim