Very possible that indeed the water pump is bad. These things do have a lifetime, and 15 years isn't all that short a time.
Hole on top is a bleed hole .. If pressure build up due to overheating the coolant will come out the hole. I would try replacing the thermostat first and make sure you bleed all air from the system after you finish installing the thermostat Make sure you have the proper temp range for your vehicle and you install it in the correct direction. If after that you have a overheating episode I would then replace the pump....
The pump is bad. No water should come out of it, None. Replace the T stat also. T stats are automatic with any coolant leak. Why take the chance.
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