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Just as I was parking, coolant came out of the reservoir, no indicator lights were on the dash. I put in about a liter of water to make the drive to the garage. As I was driving, I noticed something interesting. I had the heater on full blast and of course hot air came out...except when I stopped at traffic lights. When I got to the garage before I handed it over, I checked the fan fuse and it was okay. But am I right to suspect the fan was not working and that is why the air got cooler when the car was stopped, but super hot again while in motion?

[Few minutes later]. Wait a sec. Disregard most of that. What I wrote doesn't make any sense. Why would the interior heater blow cooler air when the car is not in motion? That would imply no circulation at idle? Is that possible? This is why I don't fix cars.

Could be a failing circulating pump, ie plastic impeller vanes breaking off giving some circulation with increased RPM while driving,

Thanks! They replaced the thermostat and said that might be the problem...or might not be, but they also said that a malfunctioning thermostat could also be the reason why the A/C would switch off after about 15-20 minutes of driving.

Is it still giving problems now after thermostat renewal?.
If the thermostat had failed (shut) then the temperature gauge should have gone full scale but the fan would not cut in. Did coolant come out of the expansion tank via the relief valve or was it when you opened the cap?.

I haven't driven the car more than about 25 minutes to get it home. The coolant came out of the expansion tank, I guess it came from the cap since there were no cracks or broken hoses up there. It is true the fan was not on when I checked after driving the car (slowly--after adding 1L of water to the tank) to the shop for repair. I checked the fuse, too. I was confused by that.

As long as the coolant tank doesn't release pressure with temperature gauge normal then, hopefully, should be OK. The modern coolant gauge isn't great for trouble shooting as all VAG group cars, certainly since year 2000, will display exactly 90C once the coolant temperature reaches 75C, it will then move very rapidly to 90C (once it reaches 75C) and remain there until/if the temperature reaches 107C, it will then read the true temperature again.

Thank you very much for this excellent insight. It's been a long time since I've worked on a vehicle and I don't really know much about this car. It belongs to a friend an we have an agreement that I can use it so long as I pay for repairs and insurance. But if it gets expensive, we will sell it. I only use it on the weekends to go on short trips.