My cousins farm house built in Armonk ny around 1810 used straw for insulation in the attic and walls . When we did a renovation it was packed with mouse/rat nests and poop . Stunk so bad it made you nauseous . One of the reasons I don’t use fiberglass insulation anymore mice love having a nice easy warm nest .I know a lot of folks up here in Alaska that milled their own lumber for their stick frame homes. They used all their kerf waste for insulating their walls. Apparently it works quite well! I imagine a person could go out and make a bunch of it with there powersaw and do the same thing. I'm building a 12×16 she shed for the Mrs. and I myself am considering using kerf waste for insulating the walls. As you said, insulation is expensive theses days. Along with all other building materials.
Pretty cool house though 12 foot ceilings and 10 ft windows . He had a company come and make custom storm windows he would put on just in the winter . Main room had these window so only 4 . Needed three people to get them attached to the frame .