Is it easy to tell where smoke is coming from? I can easily see a situation where you may not be able to.
"Generally" yes it usually can be seen pretty easily especially with the engine being off/cold so you can really get in there and working inside of a garage. They also do make smoke with dye that can help but I have never felt the actual need to go buy it, although I am sure it has its place for certain shops. Obviously working outside in a windy environment, not having a good light source, specific location of said leak, and the engine configuration all play a major role in this. Especially the particular motor configuration and the room around things within the engine bay.
I am sure in a particular case where person A) spent $1000 bucks in hopes to fix an issue and couldn't really tell where the leak was coming from, might feel like it was a lot of hype and way overpriced. Person B) maybe could have been struggling with an issue for a long time and decided to finally bite the bullet in which it ended up solving their issues. They end up falling back in love with the vehicle and actually enjoy their daily commute instead of dreading it with that particular vehicle. All of the sudden it becomes the best $1000 bucks they have ever spent. So I am sure like many things in life, it is all relative.
This is really one of the last major diagnostic tools I need that I actually will own, so I can't wait. Aside from that, without a evap smoke machine, it is about impossible to truly find/diagnose/fix with certainty, exhaust and vacuum leaks. Yes you can use propane while listening, monitoring fuel trims, O2 sensor readings, use a cigar/cig, etc but nothing beats having a true smoke machine if you work on a lot of vehicles and/or are struggling with lean conditions or drivability issues from leaks. It's one of those tools that while expensive, once you have one, you will wonder how you ever went without it you know.
OP: to put it in perspective, on my way home from work tonight, -5 to -10 F temp with -15 windchill, I was still seeing around 200-205 F or so from my coolant. So I would definitely say something might be up or starting to develop.