1) I have always baked my ornaments at 180 C for 30 minutes, and the result has been slighty puffy ornaments, which I quite like. If you like your ornaments completely flat, then bake at 150 for around 2 hours
2) You could try making scented play dough by adding essential oils while preparing the dough. Holiday scents such as peppermint, orange or cinnamon would make your house smell like Christmas