The heater going out could be due to you purging enough coolant that air is intermittently filling enough of the heater core to prevent it from effectively warming the air... could also be that the heater control valve's VSV is going out and the heater core is being bypassed intermittently. I posted some information about this recently, try searching for it. If you keep loosing coolant, well... there are a couple possibilities, look at some of the threads others have posted regarding coolant loss or overheating, the items you need to diagnose will be the same.
Copper sealants are generally ok. Most of the professional builders I know will only use Hylomar or one or two others which I never can remember. A lot of places don't carry any of the higher grade stuff due to the low sales due to the higher price... and the higher grade stuff can be a little trickier to apply in the recommended fashion. Hylomar and Dri-seal (or something like that, BMW uses it) say to spray EACH mating surface with a single thin coat, allow 4 minutes to set, assemble, allow another 4 to 5 minutes and then toque down. So, this means you need to stuff paper towels into the cylinders and tape off the valves and their bore and spray: the bottom of the head, both sides of the HG and the block deck. Makes for an unbeatable bond, but if you don't follow directions... well, you've got it comming. Of course, you're "supposed" to do that with copper HG spray too. :P If you find someone complaining about a higher grade sealant not sealing ask them how they applied it.
Don't forget that you need to thoroughly clean off any factory sealant before adding a different sealant. You should search Google for proper care before installing it though... just be aware that there is a LOT of bad info out there too; If you are unsure ask and I or someone else will see if we can find the answer.