Leaking heater hose?
 

Hi all, bought a used 1994 850 wagon recently, only to discover a variety of issues within a few weeks. The most pressing though is that it has been leaking serious amounts of coolant externally. First noticed this when I parked on an inclined driveway with the front end high, coolant was leaking out from underneath at an undetermined location. It seems to be coming out around the middle somewhere, a bit behind the front axle.
Today I topped up the coolant with some cheap premix I had bought which I think was the wrong one as it had no anti-boil additives and was overheating and leaking seriously (I mean SERIOUSLY, would have lost at least a litre or so) from the coolant reservoir cap (which is cracked, am waiting on a replacement) but as I was looking under the hood I noticed it was also leaking from what I understand to be the heater hose (the top one) going into the heater core.
It seems this is where the original leak was coming from, its leaking down onto another part below it and flowing down and leaking off the underside in a couple spots. I need to fix this problem as soon as possible, and I'm wondering if I need to replace the hose, the little yellow gasket on the connection, or what. I am not experienced with fixing cars at all, but this seems to be something I can do myself and spare the mechanic bills. I've attached a picture to show the part where its leaking from, pretty sure it is the top hose and leaking out where it connects (no split hose as far as I can tell but the end of it looks rather deteriorated). Any advice on how I should go about diagnosing/fixing it?

I will post a better photo in the morning and if I need to drive it I'll try get a shot of it when its actually leaking.

Thanks