99 Cherokee: Check Gauges light on, overheating.

1999 Jeep Cherokee Sport, 109226 miles; My boyfriend has been working on the vehicle lately. It was overheating and when he tried to drain the radiator, the liquid (if you can call it that) trickled out and was brownish-orange and smelled horrid. It took him removing the drain plug to get more of it out, but there's definitely some still in there because the smell remains. After that, he ran it and it was still ovherheating and the "Check Gauges" light came on. He replaced the thermostat but it's still doing the "Check Gauges" light and saying it's overheating. He'll drive it and when the light comes on and it says it's overheating, he'll put it into Neutral and shut it off for about 10-20 seconds then restart it and the light will be off and the tempurature is back to normal. We're trying to figure out what's going on as far as the gauges and the overheating. If ANYONE has ANY information, we'd really appreciate it!