You would probably be better off using a polyisocyanurate foam such as
Kingspan or Celotex fitted in studs and then plasterboard using
standard plasterboard. This should have a better insulating effect
for a given thickness and will make quite a difference to the heat
The vent could have been put in because what is now the WC was once a
pantry, or perhaps to provide air for an open flued gas water heater
or some such. If there is still an open flued boiler, then you
need to maintain an air supply of a certain size according to the
boiler capacity - details are in the Building Regulations.
If it were providing ventilation under a wooden floor then it also
ought to stay. Otherwise, I don't see that it would be necessary to
retain it as is. Perhaps replacing with an extractor fan would be an
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