Hi Sids. It's important to both insulate and clad to some extent. Insulation is the adding of some material between the inner wall and exterior to provide a buffer to prevent heat loss. Normally this is done with something that that contains air within as air is not a good conductor for heat. Insulating material might be fire blanket, perlite cement, vermiculite cement, or an actual gap of air. I think the easiest approach is generally a perlite / vermiculite cement. These insulation layers don't look particularly good though so you'll want to either cover them with further bricks on the outside, or a layer of simple cement/sand as a cladding render. You can use just your hands for applying both the insulation and the cladding.
If you don't add insulation you'll have trouble getting the oven up to temperature.
The insulation is placed on top of the inner dom bricks directly.
The cladding is on top of the insulation