Dear ILoveBirds: Great questions! Yes, Foamular is ideal for this type of installation. Here are a few tips:
(1) Cut and cobble: That is the name for this way of filling stud bays with foam board insulation. It takes a bit more work, but the results cannot be matched by anything but spray foam. We used the 'cut and cobble' approach with the major remodel of a home along the shore in Massachusetts. (A photo is attached.)
(2) Air seal: Carefully seal all of the edges and joints, to block air leaks. DAP 230 is best for small gaps. The 'Windows and Doors' version of Great Stuff spay foam is good for larger gaps. Cut the pieces of foam board a bit loose; there is no need for a tight fit -- which you need to seal anyway.
(3) Heat: Foam board is flammable and should never be installed near any source, e.g. a wall heater, exhaust vent, etc.
(4) Water vapor and leaks: Foamular is ideal for basements, because it does not absorb water. It can be installed just as you described, next to the poly vapor barrier. If there is any chance of a water leak into your basement, also install DriCore panels on the floor before you install your new flooring. DriCore has a rubber layer on the bottom and channels for water to trickle through. This saved the new floor on one of our major remodels, when a window leaked unexpectedly. See: DriCore Model # CDGNUS750024024, Home Depot Internet #202268752 Store SKU #361018. Seal all of the joints and edges to block moisture / air leaks with DAP 230. Also make sure you have a drain for the water to run to, with a dry well and sump pump.
(5) Fire blocking: Also read up on fire blocking, which is required at the top of basement walls, stairs, etc. Do a Google search for "How to firestop your basement" from Contractor Kurt. Roxul rock wool is a good solution (also available at Home Depot). You can stuff it into the gap at the top of the wall, in the gap along the wall, and into the end of floor joist bays. Rock wool is much denser than fiberglass, molds kind of like clay, and stays where you put it.
I hope this is helpful.