Can I use "that" instead of "it"?
2. I don't want to talk about that?
Can I use "I don't want to talk about it?"
Is "it" =that?
In what circumstances should we use "it" and "that" at the end of a sentence?
"It" and "that" each have their own functions. Sometimes the functions are so similar you can swap one for the other. Other times, you must use the correct word. Here are some examples and more details about the words:
"That" is a word that POINTS to something directly. For example if you told me a great idea you had and I said, "That's ridiculous!" In a way, it's like pointing a verbal finger at your idea.
Another way to imagine the use of the word "that" is to actually imagine whether or not you would point your finger at the object when talking about it. For example, at a zoo you see a monkey throw it's own poop. It makes sense to say, "I can't believe THAT!" (It's easy to imagine finger-pointing.) It would make less sense to say, "I can't believe it!" while pointing at the monkey.
Another way to tell when to use "that" is by figuring out whether or not there is a "this".
When you use "that" then there is generally a "this"... not necessarily the WORD "this" but there is something acting as a 'this.' For example, if I am shopping and trying to decide between two items, I might say, "I'm going to buy THIS." The other object was the "that".
When you use "it" you are REFERRING to something, but not necessarily "verbally pointing" at it. Does that make sense?
Now for your sentences:
In sentence #1 it is most correct to use the word "it". You can also use the word that, but the sentence should be worded differently to sound 100% correct. One way to word it would be to say, "My boyfriend says he'll give up smoking, but THAT is something I don't believe."
For sentence #2 you can use either one; they both sound fine. If you use the word "that," it simply implies a little stronger emotion than if you were to use the word "it".
I will try to think of some more examples where these words are at the ends of sentences.
1) You are getting a massage and the masseuse begins to rub your neck. You'd say, "I like that." (If you were to say, "I like it," it might sound like you are saying you "really" like the entire massage... and it may come across as slightly flirtatious or sexual.)
2) You get a birthday present and open it in front of the giver. You'd say, "I love it!"
3) Your friend says to you, "My boyfriend just cancelled our date at the last minute!" You'd say, "Oooooh I just HATE that!"
4) Your little brother pulls the cat's tail and you tell him, "Don't do that!"
I hope I'm making sense. I don't like to use formal words like 'pronouns' because it bores me, so I hope I am helping you to understand the difference.