for your original heat issues, try running the car without the thermostat installed, and make sure theres no blockage anywhere.. you can buy radiator flush stuff. if the engine is running ok, theres no reason why it cant be fixed, and doing that will be a hell of alot easier than trying to jam something else in there.
as far as the smart engine.. the smart is ALOT wider than a 126, and it looks like the engine setup uses up most of that width.