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Here's a part of a cabinet in my wardrobe where my printer lives. It's a bit noisy with all those hard surfaces so I am just about to put up some foam padding on all 5 sides.
Is that stupidly dangerous?
You can see I have a smoke alarm there, but it won't stop a fire on its own.
Edit: the cabinet has no door, it's always open like in the photo, but the wardrobe door is generally closed. The room has some ventilation so smells do go away.
In addition to the stuff other people have pointed out, make sure you glue your insulation down very well, so that it won't fall off and come into contact with your print head. Just in case. Other than that, I don't see anything other than the usual potential electrical issues.
I would staple it to the cabinet for easier, cleaner removal later.