1998 Ford Contour Squealing under hood

My 98 Contour has recently developed a squeal under the hood as the engine warms. The coolant light is constantly on even though the coolant level is good. I have also recently noticed a slow loss of coolant. The water pump in the car is new, replaced only 6 months ago. It hasn't been overheating, but the temperature gauge went up slightly today. A friend looked at the car and said he thinks the driver's side fan assembly has seized. Could that be the problem, or is there something else I should look at?