CDDA doesn't really have complex heat propagation because it would grind processing down. The heater may only slightly heat a 4x area and that's it. Or that's how it was with my vehicle heater.
You'll notice the same "hot air" entities on the surrounding squares that you see with fires.
I'd kind of like to know how the mutants in the center got to become mutated, especially since the lore behind mutation has become more defined over the years of development, if not changed completely. Did they escape a research facility? Did extradimensional screwery or radiation change them in the early days (is that even still a thing?) Right now the arsonist is just a quirky catgirl that is...there, and the beggar with fur is understandably grumpy about it with not a lot of further development, at least last I saw.
They probably wouldn't be forthcoming with that information with strangers, so perhaps gate it behind their quests. Something beyond just dialogue, but maybe they would want to seek out how to change back to human, or how to become further mutated. Maybe you could sway them one way or another with social checks.