Sorry I have so many posts but I have a lot of questions while getting my car all fixed up...

So my cold air intake- I have an ultragauge and can monitor the intake temp. Its been higher lately- yes, I know its August. Oddly enough it was when I put foil back pipe insulation on it that I notice the temp either went up or did not change at all (its hard to say with so many variables). My intake averages around 120 sometimes 110 on a 75 degree day. Ive seen it below 110 and am wondering what I can do- cuz it will sometimes go up to 130. Thats about the same as the stock intake. I have a bypass filter thats resting by the battery inside the engine bay. Could that be sucking in hot air before the actual filter gets any air in?
Rather than spend time taking all that insulation off, I'm wondering- first- if anyone has an explanation or experience as to why it would or would not work.

Also- is a cold air intake really better? I get confused about the timing with the air temps and I think with my chipped ECU it will make up for the fact that the air coming in is a little cooler.

So should I get rid of the bypass filter? Should I remove the insulation? Is it fine as is?

I know theres a lot of controversy on CAIs. So I'd like to get a better understanding (without feeling like I've wasted money out of all this- be nice :P )