2002 Chevy Blazer Cooland Reservoir

My 2002 Chevy Blazer started overheating a few months ago. Temp would go up, and then come back down suddenly. Also, the system tends to lose coolant. I don't think any gaskets are blown (yet), but the coolant reservior is where I think the problem may lie. Can't find any pictures or diagrams anywhere to confirm, but here's the situation. On the front of the reservior is a hose that is attached to the radiator cap (I understand this is where the overheated coolant spills into the reservior). There is one other hose connection on the reservior - and it is not attached to anything. Is this supposed to be the hose that returns the cooled coolant back to the radiator? I can't find anything for it to plug into, but from where it lays, it just leaks out coolant. I attached a picture - the red circle is where the hose originates on the reservoir - the green circle is the open end. Where does it belong?

Also, this was originally a Dex Cool vehicle. Is there any problem with flushing the system, then using traditional coolant as opposed to that stuff?