That is a small living unit. Off the top of my head
Insulate - as you said. Then, as I once read, the only heat you have to put in is how much you lose.
So, ensure air tightness, and install Mechanical heat recovery ventilation MHRV.
Get the two done by reputable tradesmen to a high standard.
If the above two are done well, then a stove or small electric heater would keep the space warm. Even cooking and body heat would meet a lot of the demand.
I'm not a heating/building/engineer.
And as Leo said, all planning and building regs must be taken into account.