Do you have 50/50 mix? Check it if you are not sure. If you have more water than antifreeze, you will have a lower boiling point. Are you slowly loosing coolant? You have to find where it is leaking! As for the ligh and overheat, you have to lose all the coolant in the expansion tank + more to overheat. Add more antifreeze to bring up the level to max and that should take care of the intermittent light till you lose more coolant.

__________________
85 300D turbo pristine w 157k when purchased 161K now
83 300 D turbo 297K runs great. SOLD!
83 240D 4 spd manual- parted out then junked