Apparently the FVIR heaters still need to be off the ground to ensure good ventilation. That came up in a succeeding post.
As to a heater with more insulation, I think you should keep looking around. There should only be a relatively modest difference between a tank with 1-inch insulation and some with 2 or higher. I don’t believe the “over a grand.” It sounds as if someone is trying to sell you what they want instead of what you want. Maybe they have some they’re trying to get rid of.
My reaction to someone like that would be, “Are you paying me or am I paying you?”
If the heater is next to a wall, direct-vent is a possibility. Power-vents, however, are expensive, noisy and finicky. We’ve had a number of posts from people who had problems with them.