Yea, its a big job. A few things to consider.
The damage is not just contained to the subfloor. Some of the joists are likely damaged as well. You may also have damage inside of walls. Oh, do you have an upright piano sitting on the wood floor? Could be in there too. Ask me how I know!
I would first want a full assessment of the damage before going any further. Anything that shows up on a report will likely only be part of the actual damage. It seems as though, one you start demolition, that you find them in more and more places.
As for the insulation. You could forgo insulating the floor and instead insulate the walls of the crawl space. Essentially you would be creating a conditioned space in the crawl space.
Also - I like the idea of constructing an outside entrance. Great idea.
If you are going to sit tight and do nothing. Treat the termites for sure. Also, and this may be a bit controversial, don't investigate too deeply. You will likely have to disclose any damage you know about when you sell. Right now all you definitely know is you have subfloor damage. if you have a full inspection you may then have to disclose the findings which may paint a worse picture. Me, I would want to know as much as possible, disclosure or not. Who know. You may be stuck living there for a long time.
The Handyguys Podcast [url]http://www.handyguyspodcast.com[/url]