Many aqueous binary mixtures, such as water ethanol, are known to exhibit multiple structural transformations that are apparently driven by intermolecular hydrophobic interaction as well as hydrogen bonding. These interactions often cooperate to form special types of self assembled structures. We study the effect of temperature on the formation of transient ethanol clusters as well as on the transient dynamic heterogeneity induced in the system due to such clustering. A major finding of the work is the existence of a strong temperature dependence of the extent of structural heterogeneity. Distinct signatures of dynamic heterogeneity of ethanol molecules are also found to appear with lowering of temperature. This is attributed to the formation of transient ethanol clusters that are known to have a small lifetime (of the order of a few picoseconds only). The transient dynamical features of dynamic heterogeneity are expected to affect those relaxation processes occurring at subpicosecond time scales. The present analyses reveal a number of interesting features, which were not explored earlier in this widely studied binary mixture.