Nope - afraid you can't separate aezoptropic mixtures through fractional distillation over a simple distillation. IIRC, a fractional distillation setup has a much greater number of theoretical plates, and this is the reason it is used to separate compounds with very close boiling points. An azeotropic mixture behaves, as you mentioned, as a pure liquid and thus cannot be separated in this manner. There are ways to separate azeotropes however, this article goes over the essentials:
http://en.wikipedia.org/wiki/AzeotropeThe reason the distillation goes better if the column is insulated is really a practical thing. Remember, essentially, you want the liquid to become a vapour and travel up the column before condensing in the actual condensor and being collected. This is facilitated by the column being isothermal, as a particular fraction can travel up the column at a particular tempearature, without having to condense and drop back down as it reaches a cold spot nearer the top.