Modern vehicle cooling systems operate with the coolant pressurized when it is hot, in order to increase the boiling point of the coolant. This is why the cap should never be removed hot, as you will get a fountain of scalding hot liquid shooting up out of the radiator as the pressure drops and the coolant suddenly begins to boil.
If you have a leak, this internal pressure never builds up. Instead the liquid is forced out of the cooling system as the engine warms up. Also the pump generates pressure to push coolant through the system, and the pump can also push liquid out of the system.
Also because the pressure doesn't build up, the boiling point is lower than in a normally operating cooling system, so the water is boiling into steam which pushes more coolant out, until the coolant level matches the height of the leak and then only steam squirts out the leak hole.
Ethylene glycol meanwhile has a higher boiling point than water, so it is concentrating in the system as the water boils off. If you are adding 50/50 mix to top it off, the glycol ratio is going to climb as the water keeps boiling off. The glycol has about half the heat capacity of water, so the engine runs hotter and is even more stressed as the glycol concentration rises.
Because the system is pressurized, the reservoir is not directly connected to the cooling system but rather has a spring valve regulator on it. If the temp gets way too high, coolant is pushed into it. If the cooling system develops a strong enough vacuum, it will suck from the reservoir into the system.
Since you have a leak, the cooling system never develops a strong enough vacuum as it cools to suck from the reservoir. Instead air sucks back inside through the leak hole.
If the cabin heater stops working that means the coolant level has dropped to the point that the coolant pump is no longer able to pressurize the fluid and push it through the heater. The pump is sucking air and has stopped doing anything useful.
Engines are meant to have a cooling jacket at all times around the cylinder walls, and only the walls normally get really hot. Since the cooling has failed so badly, that liquid jacket may not be present at all or no longer circulates, so the metal is getting extremely hot, with the heat spreading out from the cylinder into other areas. It is very possible that the metal is warping from the high temperatures and making the head gasket surface uneven, making any leaks worse.
Probably the engine block and head are being warped and ruined from this extreme thermal stress, pushing it beyond the point where only a head gasket replacement would fix it.
The engine may now need to be pulled completely out of the vehicle, and the block and head resurfaced in a machine shop to flatten out the warping, so that a new head gasket will seal properly.