I was removing nuts to change thermostat and on the bottom one the whole bolt came out!!! (I thought i was just turning nut) and it looks like it has a white substance on it.... should I wrap with teflon before putting it back in? Also..... I accidentially removed the bolt right above thermo housing, guess i should do the same thing to that one too?

 

When I have had bolts like that come loose, I have used Permatex #2 gasket maker and used it quite sparingly on the threads. I don't know how well the Teflon would work but I would imagine the heat would not be a problem for it. If you are in a pinch, use it. It would not be a long term solution for me though.