I am happy to report that insulating a hotend with Melamine foam seems to be a success., at least at PLA temperatures (around 185C).
Melamine foam is commonly available as a product like Mr. Clean’s Magic Eraser, or generic equivalents. It can be very affordable, around $1 for a piece about the size of a kitchen sponge. Perhaps less in bulk.
It seems to allow my hotend to stay within about 1/2C of the commanded temperature even while printing with a blower.
Another finding of note is that I was not able to get the hotend to work with the supplied 3 to 5W resistors as heaters. They tended to burn out. These ceramic heater devices seem to work fine. It could be just because the thermal contact with the ceramic heater is better than with the resistor, since I did not attempt to use thermal grease.