That's the crux of the question for me. The longer the heating is off,
the further it cools, and the more energy you need to put in to raise
the temperature again.

The efficiency will be higher letting it cool. The only effect that will
reduce efficiency compared to the alternative as that things get overheated
in an attempt to reheat the house to a comfortable level too quickly. This
is only likely to happen if the house is high thermal mass (i.e. thick stone
walls) and the cycling frequent. It would actually require a pretty
pathological set of parameters to make it less efficient, too.

Higher insulation would tend to reduce the heat losses, keeping the fabric
warmer for longer. This will reduce the differences between the two methods.

Christian.