Add the fire stops, but also fire caulk around them. It is an added expense but worth it in the long run.
As to blown in insulation, I have seen newer installs that have settled over time. One house a friend flipped the insulation was done a coupe of years before by the PO had settled down about 8" in each stud bay. Since he had to replace all the dry wall in the house we spent three days shoveling the stuff out of the house. He insulated with fiberglass in all the walls and ceilings.
If you are going to do it yourself over time than fiberglass is the way to go. You can do one room at a time without having to rent equipment.
Spray foam is another option but it is more expensive to install than either fiberglass or blown in is. But has the added benefit, with the correct type, of sealing out drafts. If your basement is concrete block having the block filled with foam will help a lot with air infiltration.
The ceilings in the upstairs would be R-30. Do Not sheet rock right over the joists, buy some "Hat Channel or Furring Channel" to prevent the movement of the ceiling structure from pulling screws out of the sheet rock. http://www.clarkdietrich.com/products/drywall-framing/furring-channel-hat-channel
Also insulate the ceiling in the first floor, it may not save you a bunch of energy, but it sure knocks down the noise transfer from upstairs to down stairs. Use the hat channel here also.
Hat channel also has the added benefit if being able to level the ceiling, you can shim it to take out the waves in the joists.
As for warmth, it will be a lot warmer in the house after you are done than it is now.
While you are doing all this add an exhaust fan to the bathroom and use it when you are in there,