It’s sometimes easier to just call it efficiency, but like you say, once you go into the nitty gritty it falls apart.
It depends. It's certainly economically and CO2 efficient. Thermodynamically? That's something for physicists and engineers to worry about, not J. Random Bloke.
leave your old furnace in as backup
I've seen plenty of old houses over here in Germany which did have a gas furnance that was somehow under-dimensioned -- the idea is that in the real cold days you'd still have the good ole fireplace (or coal oven), as well as not so old houses which still have one because sitting in front of it.
Gets a wee bit more complicated with heat pumps and maximising the efficiency of everything as the fireplace needs to be hooked up to the heat exchanger or there won't be any hot water and modern units are closed and look rather different, but you still get a window and plenty of infrared radiation.
Then, last but not least, there's insulation. Especially up in the arctic you should be doing your darnedest to build passive houses. Certainly possible in Kiruna, I've heard that the Norwegians are trying on Svalbard.