As long as the fill is going to be solid (no loose pea gravel), I don't think you need to worry much about a "retaining" structure. I wouldn't say an insulating facing would be helpful, but a structural cob mix with
enough straw to make it strong would be a good semi-final step. (Followed by whatever finished surface you want to make.) Experiment with various ratios of the clay and straw you plan to use, and see how much you need for a good effect. You can always rewet the test materials and
reuse them in the mass core, on the bottom if you think they are too insulative.
