Yes, and Yes.
Boiler thinks you're drawing hot water so it lights up, and looks at the HW temp. But you aren't drawing hot water, so the heat goes to the rads. Boiler sees the HW isn't getting hot (it isn't flowing past the sensor) so it makes the rad water hotter, and hotter... until an overheat stat cuts the gas off. See?
The dhw (Domestic Hot Water) flow switch turns a red led on, on the main pcb. Lower the front panel and you'll see it. The switch is the 3 - 4" round disc shaped thing just left of centre, hex tube sticking out to right has two apertures (may not be conveniently oriented) through which you should see the shaft operating when you turn a tap on. Check it returns ok. If not you can dismantle and clean the glass shaft. Actual electric switch is the microswitch on the rh end.
TURN THE POWER OFF while fiddling, the switch still switches (and clicks). If you poke something like a nail file through the apertures in the hex bit, where you'll see a spring, you'll be able to push the shaft back off (left). With power back on you should see the red light come on when the hot tap is on.
New switch RRP is about £50, a 10 minute job to swap, as a rule.
Hell, I should do this for a living.