Ahhh... Only the Exhaust Turbine side gets wrapped: That makes more sense. I still figured the intake turbine would get bleed over heat via the shared shaft, though.Questions are definitely okay on last time I checked when you're on a forum lol.
To your question, yes, the blanket will hold in heat like it is designed to do (just like you use at night!). The blanket is wrapped around the hot turbine side where all the exhaust gasses are coming in. The exhaust gasses then spin the turbine which rotates a shaft that connects to the compressor side of the housing. After the exhaust gasses do their job of spinning the turbine, they promptly leave through your catalytic converter and out your exhaust.
The compressor side is spinning at the same rate as the turbine while all this is going on and drawing in nice, cool, clean air and as the name suggests, compresses it (boost). After that I'm sure you get the idea of where the air goes.
For the blanket, we want that turbine to hold onto as much heat as you can reasonably allow. This results is significantly less heat soak of electronics, coolant (waterpump!), and the overall temperature of the engine bay. You will actually get denser air because the compressor side is cooler with the blanket over the turbine side. Also, the hotter the turbine gets, it will actually spool faster resulting in you getting your peak torque faster.
As for longevity of the turbo, I'll say any mod you do to your car, you do at your own risk. The turbo is made to handle a tremendous amount of heat however. Unless you're pulling stupid power and squeezing every last drop of hp from the stock turbo, you wont see any noticeable decrease in life expectancy. I've been running one on my duramax for years and I recently pulled the turbo off to delete the egr on it. That thing is still in tip top shape after 230k miles and absolutely no shaft play. A duramax could be just a little bit different though so I suppose results may vary. My engine temps are significantly lower though and I've been very happy with it.
Another interesting point you made that I never considered is that a hotter turbo spools up faster.
Sounds like something I might consider doing if you find a good blanket and let us know about it (especially since I will be installing a new intercooler soon).