Fireplaces, Heating Stoves, Flues and Chimneys - Cold air from heat circulating system

I have a rarely-used wood-burning fireplace with heat circulating system (draws at bottom, circulates and gets heated through back of cavity, blows out at top). It also has outside air venting with a knob that is supposed to open and close the vent. I can feel cold air coming out of the bottom vent (which normally draws air in if I switch the fan on). I have the chimney flue damper closed and I do _not_ feel any cold air coming from there.

1. This knob to open/close outside vent doesn't seem to be doing anything. How can I verify? It is easily fixed if broken. Is it true that outside air vent isn't critical?

2. Since the fireplace is rarely used, what do you recommend I do to seal it off? I don't want to do anything permanent, however I've got to stop the draft.

Thanks for any insight.

Bumping this up...and simplifying question #2. Is there an easy way to remove the upper and lower grills so I can add insulation? The gills don't seem to be removable, however the manual for a newer version of the insert (Majestic Royal Warm Majic) states they are removable. I'd like to do minimal damage so this feature is useful for future owner. Note, I do not use this fireplace for anything more than a candle burning facility. I've gotta get rid of the draft. I think my cold air return is pulling the cold air from fireplace to other side of house. Thanks...pls respond even if it's to tell me to read another thread.