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The P0420 could be related to the gassy smell, but shouldn't affect engine management. The P0420 usually means the catalyst or the downstream O2 sensor is bad. The ECU doesn't use the downstream O2 for fuel calculations. It's basically just a "fix it" code.
To put things in perspective, my Prius also has the P0420 code. It has an aftermarket catalyst, and apparently the ECU doesn't like that. But the car still gets 60 mpg.
However, the long warmup times can definitely affect fuel economy. That would typically be caused by the thermostat sticking open.
After that's fixed, you could also try an upper grille block, for even faster warmup times. On the Mk4 cars, the upper grille is easy to remove and reinstall. So a grille block should be a piece of cake. Just zip-tie a piece of sheet plastic or whatever to the back of the grille.
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