I'm about the same age as the OP, and I can confirm that in the 1980s, while I might have been distantly aware that a small number of people like Wendy Carlos went to Europe to get "sex change" operations, it seemed so rare as to have nothing to do with gay rights, which I got involved in around 1988. I helped found my university's first Gay & Lesbian organization, and a year later, it became Gay, Lesbian, and Bisexual. I don't think it crossed any of our minds to include transgender because it simply didn't exist in our experiences. I didn't meet a transgender person until I was 26 and living in California, and I only met two other transgender people during that entire decade.

As to the history, there were various ideas that floated around among the early sexologists, like the idea of "inversion," where lesbians were seen as men in women's bodies, but, if you think about it, all that it steeped in trying to preserve heterosexuality and sex role stereotypes.

One name I haven't seen mentioned here is the controversial figure of John Money, who was in many ways the modern inventor of gender identity. You can look up his whole disturbing career.

Queer Theory didn't move into universities. It was invented in universities and collided with an already-growing movement of looking at the histories of actual lesbian and gay male communities along an ethnic studies model. Lesbian & Gay Studies was gradually displaced during the 1990s by Queer Theory, along with the rise of Gender Theory championed by its high priestess, Judith Butler. Butler's work was then translated and disseminated to a popular audience by people like Riki Wilchins, who was also involved in the Camp Trans protests against MichFest. Leslie Feinberg also helped popularize these ideas.

A number of figures involved in Queer Theory eventually became trans like Pat/Patrick Califia.