your hose break and steam out that indicate you has leak on heating core. car pump coolant from radiator to heating core to warm up air (2 sperate enclouse systems) the only way steam comming out is your water vapor from heating core breaks, that'w why your rad water get lower and lower. you can try "by pass" the heating core, or block it, but blocking may develop inequal pressure in cooling system.
leading on new enging may be result of oil "sludge" (poor oil circulation lead to very high oil pressure at specific area thus start leak) use good motor oil and change at 3-4oookm, or use good synthetic oil for entend drain. Toyota engine are famous for sludge.... good luck.
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