If you're 35, then it sounds to me like you're getting your heart rate way up there. Maybe too high up there. I think you're supposed to aim at 80%, no more than 85% for sustained periods and certainly not >85% for a beginner.
At your age, target (80-85%) is 148-157 BPM. I'd try to get to that point and work up to being able to stay there for at least 45-60 minutes. (If you are getting up into the 180s for BPMs, I seriously would consider slowing down. You're working your heart at nearly 100% for long stretches. At least talk to your doctor about that?)
Yes to building muscle. You have to do that to change your body in all the right ways. I think every pound of muscle that you add burns 50 calories a day, so 10# of muscle equates to 500 calories a day (burned). So you definitely want to build muscle in tandem with your cardio program.
And about those calorie counters on machines:

. I use two gyms. At the one gym, when I do 90 minutes on an elliptical at about 138-145 strides, it says that I burn about 1000 calories. I use the same model machine at a different gym and doing 90 minutes, same strides, yields 25% fewer calories burned. The lesson for me is to use the calorie counters only as relative measures--so that I can see if I'm working hard in one workout compared to others.
Last thing. The American College of Sports Medicine recommends that to lose weight, you have to get cardio 5 times a week for 40-60 minutes and do that in your target heart rate zone. I do about 65-70-90 minutes 5-6 times a week and I
maintain my weight. I don't eat a lot, so that 40-60 minute (to lose weight) rule is a loose guideline, especially as you get older. You've got to find what works for you. I will say this: I have to work much longer and much harder as I get older to maintain weight and muscle; even longer and even harder if I want to build muscle. I'm >40 and it takes much more to maintain what I have and now, I have to do more than I did in my 30s; in my 30s, I had to do more than I had to do in my 20s. I'm assuming that in my 50s, I'll have to do more than I'm doing now. It's hard incentive to try to stay ahead of this so that it's a matter of maintaining the muscle that I have v. building more of it.