The heating issue could be the thermostat or there is an additional heater module in the heater itself for low temperatures when the water temperature is not hot enough. It's hard to get at and I don't know the price
The exhaust smell could be the injectors leaking past the copper washers. I had this on a 1.8 06 model, smell was awful, I didn't believe the lady to start with. Only leaking on one injector. You have to replace the bolts as well but their cheap enough.