We study numerically and experimentally various characteristics of a dye laser, using an optothermal bistable device as one of the cavity mirrors, when an etalon is inserted in the laser cavity. Firstly, we develop a model for describing this laser system. Secondly, we show that this laser can exhibit bistabilities in both intensity and wavelength simultaneously. Thirdly, we study one of the applications of this system: using it to improve the output power stability of a laser. Theoretical and experimental results show that, under proper conditions, the output power fluctuations at low frequencies which are produced by gain changes can be reduced remarkably by using this laser system. Finally, we study experimentally the switching dynamics in this laser, and demonstrate that optical flip-flop operation can be realized in it by positive pump light pulses, or by positive pump light pulses for onswitching and additional positive light pulses (to change the phase shift of the bistable mirror) for downswitching.