As far as the insulation board to use, I use a extruded polystyrene, such as Foamular or Dow Blueboard, although some will use the Icocyanuate Urethane boards (Such as Tuff-R) with good success, Although it is usually a bit more costly. If you go with a 2Ē Styrene, that gives you an R-10, which effectively stops 90% of conductive heat transfer. This should be adequate, since part of the insulated area is below ground & ground is an insulator, be it a poor one.
As far as insulating the ground, it all comes down the expected returns of the action taken. The temperature difference between the heated space & the ambient ground temperature is minimal, making the task more costly than any projected savings. This added to the fact that the ground is an insulator anyway, be it a poor one, the need for more insulation is somewhat non-existent. The only exception would be where the ground will be the floor of the living space (As in a slab). Even there, the issue is not heat-loss, rather comfort. Plus, the air in the crawlspace is acting as an insulator (air is one of the most effective insulators we have, with a value of about R-5 per inch. The problem is that of convection. As air warms, it rises, taking the heat with it. Except if you are using in-the-floor heat, you can see this if you measure the temperatures in a room at various elevations, you will find that the air next to the ceiling is warmer than that by the floor. In a crawlspace, convection is not working against us, making the air an effective insulator.)
The reason for adding a heat source to the crawlspace is, that in the living space, convection is working against us. As air warms, it rises, taking the heat away from the floor. Even in a situation where the floor is insulated (as in a mobile home) the floor is noticeably cooler. Unless there is area specific heat added, such as in-the-floor heat, or heating the area below the floor to a temperature closer to the living temperature, the floor will be cooler. You canít change the laws of physics! Some might argue that this is an energy waste, as your heating an un-lived in area. This is true. The issue is, however, a matter of comfort. If you want warmer floors, this is the price you pay.
When you insulate the perimeter, effectively putting the entire crawlspace inside your thermal envelope. Then, if you have an adequate vapor barrier on the ground, you no longer require ventilation anymore than you need to leave to keep a window open on an insulated exterior wall. In fact, ventilation in the crawlspace is usually counterproductive, allowing moisture into the crawlspace. Any moisture that does find itís way through our barrier is slowly dissipated through the entire structure.
The issue of standing water on the crawl floor is a matter of concern & should be remedied. Perhaps a drainage system & a sump pit would help. Perhaps a layer of porous material (course sand or pea-gravel) under the poly would eliminate the direct contact of standing water to the vapor barrier. This way the vapor barrier just needs to be a vapor barrier and not a water barrier too. Many put a layer of pea gravel on top of the poly too. This holds the poly in position and protects it from damage.