My preferred insulation is rock wool - whether batts or blown - as it is hydrophobic, unappealing to insects, naturally non-combustable and dense) and inert.   

When either burns, you get two outputs from the combustion - water and carbon dioxide.

I haven't lived in or owned a house with a forced air combustion furnace since I was a teenager, so I was thinking specifically of hydronic boiler, geothermal, and heat pump check ups.

Wall Street is going to figure out these things are stupid, pull back their dollars (think dot com bust, when investors realized that "people talking about a thing" and "actual profitability" are NOT, in fact, the same thing), and poof there goes DSCR, before you know it you have to squint to tell DSCR rates/fees from HML, and at that point why not just save the hassle and get a HML?

Heating oil isnt that combustable , thats why the smell lingers it doesnt evaporate quickly , its an "oil" dont worry about sparks .

We brought the common wall with the adjoining unit (along the kitchen and bathroom) up to current fire code (on this side):Due to our proximity to the property line and the neighbouring building, we also covered the rear external wall with resilient channel and 5/8" fire rated drywall to allow us to use vinyl siding, versus more expensive non-combustable siding solutions, when we re-clad the building.In addition to using rock wool (Roxul Safe-n-Sound) insulation in our fire walls, we installed it in all bathroom walls, the bathroom ceiling and in the "TV wall" and walls and ceiling surrounding the laundry space to provide sound deadening. 

you will need to install a non combustable surface at floor level in that area if you leave the fireplace in.

The chimney was used to vent the furnace and hot water heater combustibles.

If so, it will considerably more efficient than an older draft/convectional flue heater and will not suck warm air from the conditioned space for combustion.  

Of course you have to maintain the property, pay property taxes and keep it surrounded with a non-combustible fence.