Problem and thermometer warning

Have a 2005 Prius with about 80k mileage. Drained the coolent out to replace. I've since learned a number of things from these very helpful forums, but I didn't know about the multiple drainplugs, so only used the one attached to the radiator.

Since then, I'm getting the "problem" indicator with the thermometer icon once the engine heats up, and the heater only occassionally blows hot air, once the car is warm. If I reduce engine load, the light goes off (it's cold here in MI).

I'm assuming I have air trapped in the system, but it doesn't seem to work itself out on short trips, and I'm concerned about overheating and damaging the engine.

I called a local Toyota dealer, who told me $160 for a coolent flush, assuming that would clear it, which seems very high to me.

Any suggestions? I saw a thread referring to a bleed valve, and I'll try to locate that.