E36 318 Overheating !

[e36noobie]

Hi all, I'm a 1st time E36 owner (1998 318 Petrol), and I love it. But it has issues ! Please help !
A few weeks after i got it, i was driving along and noticed that my heaters were'nt getting warm and then noticed that the temp gauge was going right up. I pulled over and found that my coolant level was very low, after a bit of searching I found that a hose had dis-connected at the back of the engine. I found the jubilee clip was loose so I re-connected it to the black plastic pipe and made sure it was tight. I called a local garage to check if I coud now drive it, They couldnt come out, but advised me to loosen the bleed screw and run the engine up to temp, keeping topping up the water and with the heaters on full heat and power until they blew warm and no air was coming from the bleed point. The next day I checked the coolant when it was cold and just topped up to the Kalt mark.
I did all of that, and all has been well for the last 3 weeks, until today !

Again I noticed the heaters were'nt warm and temp gauge going right past half way.
The symptoms now are -
The pipe at the back of the engine and all others are connected.
No apparent leaks.
I could see the coolant was right up to the top of the tank.
The top hose was very hot and very hard.
There was no gunk under the oil filler cap but the engine was clearly very hot.

After allowing it to sit for several hours I re-checked -
The engine was still not fully cold.
Hose and coolant level were still the same.

So I took off the coolant cap and a lot of coolant gushed out with big air bubbles coming out.
After that the coolant level was still right at the top though ?
No sign of oil or anything else in it.

I started the engine for a minute (cap was still off).
The coolant level stayed the same.
There was no flow coming out of the little hole at the top of the tank.

I decided it was best to turn off and ask you guys for help !

Sorry this thread is so long, but iI thought it would be best to give you the whole story, Please help me !