Sounds like the tach is probably just worn out…Try wobbling the connector on the control box while the tach is fluctuating to see if that makes a difference….Having the tach pole setting incorrectly adjusted would not cause the tach to bounce/fluctuate, it would just cause an inaccurate RPM reading. A loose wiring connection would probably cause the tach to bounce up and down from zero RPM….
But, as with anything electrical, anything is always possible….It is best to start with the simplest/easiest solutions though….
The simplest thing to try would be to plug in another tach to your control box….I realize it might be tough to find a plug in tach to "borrow" for a few minutes, but maybe your local dealer can help you out….Again, your tach gets its signal from the alternator….So, if the alternator is not working properly, this may affect tach operation. There are some relatively simple ohm meter tests for the alternator windings and rectifier diodes though.