Right to make it easier for everyone (especially my head lol) lets take an issue at a time, it will make things easier IMHO.
The major concern was the burning smell you reported, I assume that the sort of pungent smell I feared is not present then ?
Assuming this is correct then that is a good thing, should this smell be there then there is a serious (possibly life threatening in the worst case) dangers, but a simple "hot" smell type "burning" is far less worrying, and from what I can see does start to suggest a dust\maintenance type issue, luckily this is easily sorted with care and common sense.
You have now gone back to what sounds like a similar occurrence to what you face now, assuming again the smell is not of the pungent type it does suggest a recurrence of the last time to some extent at least, so it sounds like a spring clean is well overdue lol, it sounds like you may have done this already, if not there are a few ways people approach this task, many promote the can of compressed air, great in theory, but I am concerned about blowing off loose connections\jumpers, so use with caution, also it's wise to do this outdoors, bit obvious to some, but my wife would slice and dice me if I did such a task indoors lol, the amount of dust can be overwhelming even in a fairly clean system (my wife has dust allergy's hence the caution lol).
Then you have the much safer gentle paint brush, where you physically brush the system off, the benefit is it's so gentle you're unlikely to disturb anything, but the draw back is the brush can't reach everywhere, but is great for delicate area's.
Hoovering is the option I use (along with the brush when needed), the benefit is I can do it indoors without risk of upsetting the wife lol, the downside is you could Hoover up loose parts\jumpers, a way to minimise this is stretch an old pair of tights over the nozzle, it will stop anything going up the pipe, but like the can of air it has to be used with caution.
Now assuming maintenance is complete, and all is clean, we can move on, to begin the removing of the side of the case, and the temp's and symptoms you mention certainly support an overheating issue, 70 degree's is my rule of thumb that something needs to be done, you're getting to the stage where you can damage the system, not that great at 70, but as you go over the risk grows, so this needs attention, even the lower temp you seem happy with is still high to me, and should be bettered if possible, 30 degrees is a very good temp to aim for, and achievable by most, but there are many elements to system temp's that affect this goal.
Arctic Silver is considered by most to be the best thermal paste, and it is highly advised to use a proper
thermal grease remover, it is a liquid you use to clean the old paste off, it means the new paste can do a better job, there is a 2 bottle kit that has a cleaner and purifier to completely clean the grease off, putting the new grease on again has better way's than others, although there is not a single way all agree on, but for the most part the main points are agreed,
Main point is do NOT touch the surfaces when cleaned, and use a lint free cloth to clean, this avoids contaminants, the hardcore suggest putting some cling film over you're finger, and rubbing the thermal compound in first to help fill the voids (on both CPU and heatsink), even though it looks smooth, it will be filled with pits, so doing this helps fill those, next is use a credit card to spread an even layer over the surface area, some say just put a line up the middle, as to if a user notices the difference, I guess it depends on they're set up.
The fan is another arguable point, but I think you will find most will agree blowing ON to the heatsink is the better way to go, it's certainly the way I go, but you can easily test what is best for you by checking the temp after say 1 hour of use, then shut down, reverse the fan, and repeat, see which gives the best result in this case.
Factors that can vary the temp's, the case, this can make a massive difference, cable management, having them nice and tidy increases the air flow, all over the place they hinder it, dust and\or filters, the system needs to be clean, it is suggested to regularly clean out the case from dust, and check if the case has filters that these are cleaned often as well, air movement\heat, having GOOD fans in the right places helps move the air round the parts, and cools them down and removes the heat from the system.
Often people overlook having a fan on the hard drives, many cases have the provision for a fan in the front for the hard drives, but few include the fan, so see if you can add a fan there, it can make a large difference, if hard drives run too hot it affects performance, a lot, location, next to a heater does not help, and if on carpet it is best to place a piece of board under it, otherwise the carpet fibres\dust can block any bottom vents and suck in the fibres adding to the dust.
Now I fail to see how a factory reset can cause such a problem, but as I said my head is messed up and others may see something I don't, but too me once you set the bios options and save them, thats it, factory reset or not the system should do as instructed, so I repeat about checking the menu for both Drive priority as well as boot priority, it is the Drive priority that is the main one, but not all systems have this, but when they do, by setting the drive priority too the OS drive, tell the boot priority which hard drive too look too for the boot process, so check this.
Mixing Sata and ide drives is fine, although it can cause initial headaches getting the settings right, you say the hard drive is on the middle plug on the ide lead ?
This is for a slave, so the hard drive needs to have the jumper set to slave, or cable select (CS), some systems wont play nice with one or the other so see what works for you, newer boards only have 1 ide port these days, is this the case here ?
I am just wondering why you are sharing the optical drive that is all, another setting to check is to do with how the system handles the Sata ports, often you will find raid and ide as options, the other option AHCI is not used as much as not all systems\set up's can use it, check this is set to ide, logically the system should boot to the Sata drive set like this with the ide drive available for storage, does any of this help ?