Let's say I didn't have any soil. What could I use instead to grow a plant? Other than water. Like could I just place a seed in a banana peel or something? I would prefer it didn't stink either.
You do not want to go anywhere near the vermiculite - it IS asbestos. If you think it is - have it tested. You can put unfaced batts over the old blown in fiberglass dont use faced - the insulation has to breath or it will sweat and develop mold. Check out the blown in stuff it comes in bales at Lowes - its much faster to install and Lowes has the machine.
I can't see why not just put batts on top of the old loose fill. I did. (It would have been a good idea to clean up the rat droppings first - eew - but it would be a huge job. You don't want a shop vac, you want a truck-mounted model, and yes you'd want to wear a respirator and a full suit. The glass fibres get in your skin and itch)