The gauge is not very accurate, many cars don't even have a gauge as most modern drivers are not expected to understand what it means anymore.....
"The temperature gauge on modern cars like the Mini are controlled by the ECU...and does not necessarily tell you when the engine is overheating. When the engine is started from cold the ECU will push the gauge up in unison with the coolant temp, HOWEVER!.....when the gauge reaches 'N' or midway the ECU holds the gauge at that reading unless the engine gets exceptionally overheated by which time it is usually too late. It is what's commonly referred to as a phoney gauge. Lot's of cars these days have such gauges, many new cars don't have a temp gauge at all.......just a warning to stop when overheating is serious."
The philosophy is, basically: "we don't want the owner to know or worry about how hot the engine is most of the time, we'll decide what is within the normal range".
Also once the water has all boiled away to steam or leaked away, the eng temp sensor can't signal it is overheating as there is no liquid in the cooling system to give a gauge reading.
Not sure what is causing the rubbery smell but it should be investigated, rubber aux drive belt slipping and getting hot perhaps? also check water pump drive pulley is turning freely with belt?