oil pressure switch or sender? wtf

Took the car on a LONG road trip this weekend and she did great. I got some driveline vibes to sort out though, but for the most part it was a pretty good ride.

After stopping for gas I pulled back onto the highway and noticed that my oil pressure gauge was dipping pretty low, not in the red zone but pretty low on the gauge. Below the "N". I checked the oil and it's perfect and clean. Not sure what can cause this. It fluctuates a lot and then at times it's rock steady on the "A" in normal.

I hear these are just switches and are either on or off. If that's the case, anywhere on the "NORMAL" gauge means pressure correct? I bought a brand new sensor when I put the motor back together and it said clearly on the screen "Oil Pressure Switch" and the guy told me that it's an on/off switch, not variable.

On a side note, what are the symptoms of very low/zero oil pressure? I was thinking the lifters would start tapping from lack of oil and ultimately bottom end knocking. Oh and the oil pump is brand new as well and the pickup was ultra clean even though I still ran some carb cleaner through it.

So probably nothing to worry about? I do want to buy a quality Autometer oil pressure gauge kit though. This way I know for certain what my oil pressure is. Not so much for this stock engine combo, but for the turbocharged windsor I have planned!

That's the point though, I already did replace it. I replaced the old one because it was acting funny, but not like this. I'm at the point where I don't believe any company is capable of producing a quality sensor anymore!!

I've noticed during another trip yesterday that the needle will start to fluctuate after about an hour of driving. Also, I notice water dripping on my left foot, it's coming from the A/C vent on the left side of the dash. Just thinking out loud here, is it possible that the water is dripping down onto some electrical connections and perhaps making the oil pressure gauge go nuts?

To rule this out I'd have to drive around for an hour without the A/C on. I will go on a nice topless cruise at some point to see if it still does it. Doesnt' seem likely to me.

On a side note, why is water leaking out of that vent? Is this normal??