Should I insulate the roof on the inside or outside

Stop the leaks

You're paying good money to heat/cool the air, keep it in your house. Check the exterior for obvious leaks such as air blowing through a door gap or windows that don't close all the way. The less you absolutely need to use that area the easier the solution is. If it is a hole in the wall fill it with some insulation batting, if the window is cockeyed and not sealing cover the gap then seal the window with shrink film for a temporary solution while you're getting the rest of the house under control.

After you have the air contained make sure its going to the right places. Check as much duct work as you're able to get to for leaks, small gaps in joints or corners can leak air that will short cut the system and waste your money. Aluminum tape is recommended here but just simple duct tape would work as well. Might not hurt to throw out the money to have a furnace guy come out to check over the system and make sure the controls are all working properly and you're getting as much air through the vents as you're supposed to.

Insulate

Go through and prioritize what you can afford now and what you need to put off and how much they will effect your heat loss. Your priority #1 better be that sliding glass door, They have a very large surface area with less insulation than walls (in most cases, tbd in yours) and with one pane of a double pane broken its lost a tremendous amount of its insulating factor.

If you do not want to insulate the bottom of your roof in the attic then by all means wrap insulation around all the duct work which is in the attic, I would recommend both. Adding additional cellulose insulation to the attic would not hurt but will likely have less of a benefit as most of the other things listed.

Replacement windows will help but there are uglier things which can be done in the mean time which are much cheaper that could help get the costs and comfort under control such as storm windows.

You can do this, especially for rim joists if the house has a basement or crawlspace. In fact, that's the perfect application for this "cut & cobble" approach. For walls it can still work too, and can be especially cost-effective in a situation like yours where you have access to a lot of cheap or free material that's not in board form. You can either cut the pieces loose and seal them to the framing with spray foam, or cut them tight and seal them to the framing with caulk. Your choice. Not a big deal wither way.

There's not much else you'd need to consider. You don't need a vapor retarder like the kraft facer on fiberglass batts. Just make sure you cover it up with drywall on the interior side and that the sheathing on the exterior side is intact and covered with a water-resistive barrier like Tyvek or tar paper. Ideally there would be more rigid foam outboard of the sheathing to cut down on the thermal bridging through the studs, but that's another matter.

Here are some more details on how to do it right: http://www.greenbuildingadvisor.com/blogs/dept/musings/cut-and-cobble-insulation