1) I would start by trying to stop the oil leak that is causing the problem. Once that is solved then the heater/defroster won't pick up any smoke.
2) The door handle repair is easy. I've replace the plastic thingy inside. It took approx 20 minutes. PP has a tech article.
http://www.pelicanparts.com/techarticles/914_door_handle/914_door_handle.htm
3) Yes, new handles are available but they are very pricey. I recommend repairing the ones you have, if you can.
4) The problem could be either you ignition switch or the wiring. The next time it fails, get out your volt meter and begin checking. Do you have 12 volts at the starter's large cable? If you have someone turn the ignition switch, do you have 12 volts at starter's small wire going to the solenoid?