I would say your heater core has gone bad, you may be losing coolant from the hoses connecting the heater core to the firewall. I would check to make sure you don't have leaks around there.
Sounds like you've got a leaking heater core. If the steam has a sweet smell (like maple syrup), I'd make it a definite yes.
Yes rusty colored stuff coming out of the vents is a for sure yes all the way
