E30 Zone

The car is starting to overheat when stood in traffic, with no hot air from the blowers. If I get the engine running (hold it at ~3k rpm), hot air re-appears at the blowers and the coolant temp starts to drop.

Am I right in thinking this is most likely a water pump on it's way out?

does sound like it, is there any leaking of water or any funny bearing noises, could be that the veins on the pump have worn or broke off or the actual impeller has broke free of the pulley and is only pumping at high rpm.

Disconnect the top heater hose on the bulkhead, and push it back on with coolant flowing from both sides. It may be necessary to fill the coolant bottle to the top first, or slightly pressurise it by some means.
If this cures the problem at first, but then it starts again, you probably have a head gasket problem.