1) The resevoir can't be used to refill the system when it is very low. It can be used to top it off if there is fluid still remaining in it however. If it gets really low you have to take off the cap on the radiator and fill it from there. The symptoms of no heater heat and a hot gauage all support the 'low coolant' theory.

As for the 'white smoke' - is this out the tailpipe? If so the coolant is making its way into the cylinders somehow. Most likely this would be from a leaking headgasket - B20 heads are hard to warp or crack unless (I guess) brutally overheated. If the 'white smoke' is steam coming out from the hood area it could either be the engine overheating from low coolant level (see filling procedure above) or possible leaking out somewhere, though that usually won't cause a lot of steam.