You want to fill the area above that wall, just between the floor joists? I’m not sure the faced fiberglass is worth the trouble. Are you trying to mitigate noise? What’s that wall made out of, and how thick is it?
The welding blanket is a great idea. But, fiberglass, can you cut it without shedding fibers everywhere?
Avoid ANYTHING that will burn. You’ll violate your new code compliance. You can get fiberglass insulation panels with a foil backing. These can be cut to size with a utility knife. Some good tape should hold it in place.
Do a search for “basement fire barrier” and you’ll find other ideas.
https://www.lowes.com/pd/Johns-Manville-R-19-Wall-96-sq-ft-Faced-Fiberglass-Batt-Insulation-16-in-W-x-96-in-L/5002123255