First, I would never put foam over batt fiberglass insullation. One of the benefits of foam insulation is that it creates an good air barrier as well as creating a good R-factor.
Before you pick any furnace, a heat load analysis must be done on the house. This takes into account the orientation of the building, the amount of insulation, the size and orientation of the windows and doors. Then, and only then, can you choose the size of the furnace required. The type of furnce is immaterial. Once you know what size you need, then you can make choices about the type. In your situation, I'd consider a high efficiency, closed combustion system. This could probably vent directly out the wall and gets its combustion air from outside. They often have only minimal clearances required. Other than the sound (they're usually fairly quiet, but would be annoying in say a bedroom which might not be allowed by code anyways), closing it off into a closet with appropriate room for maintenance, it should not impact the space much.