Welcome to the forum!
1) Temperature control
Bettas are tropical fish, and require temperatures in the 76-84F range. If the temperature falls below the mid-70s, they become cold. Their metabolism slows down (including their ability to digest food, which can result in bloating), and they become susceptible to illness.
You can definitely put a heater into a 3 gallon tank. (I have four 3 gal tanks, myself.)
Ideally, get an adjustable heater (25watts is a good size). If you can't afford one though, pick up a preset heater,
such as this Marina Betta heater from Petsmart.
Also, pick up a floating glass thermometer
like this one. ($3 at Petsmart, but less than $2 at Walmart.) This will allow you to monitor the temperature easily.
2) Clean water
Ideally, a 3 gal tank should have two water changes per week: one large (90-100%), and one partial (about 50%). Water changes are the only way to remove toxins, wastes, etc from the water.
Since you have a water testing kit, you can use it to help you determine when to do water changes. As soon as the ammonia, nitrate or nitrite readings begin to climb, it's time for at least a partial water change. Or, if you prefer, just do water changes on a regular schedule.
But you do need to do these. Otherwise, it's only a matter of time until the fish becomes ill. (Remember that the tank is both their home *and* their toilet bowl!)
3) Food
Feeding him 16 pellets is DEFINITELY overfeeding him!
A betta's stomach is about the size of its eyeball. For most Bettas, getting about 6 pellets per day is plenty. (Some people here feed a little less or more. My bettas tend to do well at 6 pellets per day, though.)
Also, look at the ingredients listed on the label. Foods with a lot of grains/fillers can cause constipation and bloating in bettas. Look for words like:
meal, soybean, wheat, gluten, potato, rice, etc. If you see these, consider switching brands.
On this forum, the two most often recommended foods are:
--- New Life Spectrum Betta pellets, and
--- Omega One Betta Buffet
These brands are well tolerated by bettas.
4) What to do for your bloated guy
1) Fast him for a few days. (If you've been feeding him 10-16 pellets per day, a few days of fasting is NOT going to hurt him.)
2) Do some partial water changes.
3) Heat his tank, so it's within the 75-84F range.
4) If the above suggestions don't work, let us know. The next step would be to add a small amount of Epsom salt to the tank.... But there's a good chance that just clean, warm water and 2 days of fasting will help.
Keep us updated!