I have an outlet with 2 spaces and the upper one is very hot and it smells bad. What is causing this and why only the top one hot and what about the smell? Can it catch on fire?

It might have a short circuit. That can catch fire. See if you can trip the breaker switch to it.

I would plug a lamp into the good part of it and turn the lamp on. Switch the breaker off and on. If the lamp goes off, then back on, that's the one to that circuit.

Be sure the power is off if you try to replace the receptacle yourself.