but the 555 chip gets really hot I can smell it

There's something you're not telling us. There is nothing in the schematic that should cause the 555 timer to dissipate enough power to get hot to the touch.

Shorting something out which was considered a huge No-No in my day is business as usual in these circuits at these voltage and current levels. Is that correct?

There are times when shorting things is perfectly fine. I've shorted the base-emitter junctions on transistors when I didn't want them to turn on. I have EPROM programmers that raise the voltage of regulators by inserting diodes in series with the ground connection. One or more of the diodes would be shorted to vary the output voltage.

Note that the schematic is drawn backwards. Sometimes it makes sense to do that. This isn't one of those times...

 

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I will look into this, I can't get back to working again.got to love this