Yes to it's still in the foil when you wrap it in the old towels. Add some apple juice to the foil packet. That sort of braises the meat and helps to break down the connective tissue to make pulling easier. I spray my butts in the smoker every time I add wood with a 3 parts apple juice and 1 part bourbon mixture. I spray some in the foil packet at the time I foil.
Yes to that fact that after it is foiled you can finish in the oven (at about 250 degrees F). You can also smoke pork at a slightly higher temp than 210. That would help with the time issue. I usually try to maintain 240F when I smoke pork.
The butt I did today went into the smoker at 7AM, went into the cooler at 4:20PM, and was pulled at 6:30PM. Pictures at the following link:http://www.smokingmeatforums.com/viewtopic.php?t=2047
Hope this helps.