Is it hazardous if my heater flue is not connected solidly to the chimney vent tube; there is a gap on both connection ends... also does the overflow pipe have to be copper;it is galvanized steel?

I'd like to see a picture to be absolutely sure, but yeah, a gas flue needs to be air tight and solidly connected to the chimney. Here, smoke pipe (flue pipe) is required to have a minimum of 3 screws per connection (if 3" pipe) and the connection at the chimney should be air tight and sealed well using a high temp. flue cement...;)

In terms of the overflow pipe, if the heater is super old then galvanized pipe was the norm. back then, so there is no "violation", per say. With that being said, it may not be a bad idea to get the old T&P valve replaced and a new copper (or plastic) overflow tube installed for safety sake!

Back to you...

Mark