They are the same as a nuclear powerplant in a very basic concept level – radioactive fuel makes hot water and we extract the heat from the hot water to do stuff. The exact plants and nuances of how they function are varied, but it’s the same rough concept.
They don’t really produce much waste, actually I believe the current generation of nuclear plants will last *longer* than the submarine they are built into. So it’s a sort of fuel it up once and it’s good to go until you dismantle the ship sort of thing.
They do produce waste heat and yes, you can theoretically use satellites to look for trails of water that’s warmer than it should be to find subs close to the surface.
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