Your description of the smell of coolant when the heater is first turned on is the PRIME symptom of a core with a slow leak. It needs to be fixed for reasons other than just the annoying smell. Here is why:
An XJ's cooling system is it's Achille's Heel. It MUST be in virtually PERFECT condition to prevent overheating in warm weather. A heater core with a "pinhole" type leak will not allow the cooling system to hold pressure. If it won't hold pressure, it's a candidate for overheating in warmer weather.
I recommend you fix this ASAP.
1992 XJ -- stock (RIP)
2000 XJ -- lots of basic mods. Sold to fellow forum member. I miss it.
2014 JK -- the project is just starting!