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I think you have a fundamental misunderstanding of what modulation is for. All things the same and you take a burner that is on/off and one that modulates, you will use the same amount of fuel to heat a given space to a given temperature. Modulation is there primarily to eliminate short cycling, which generally lowers the life of the equipment. Longer cycles can also increase comfort level as there are less swings in the room temperature

If you have undersized a boiler, making a change to the water temperature will not increase the boiler capacity, it will however change how many BTU/h your emitters can output. Water temp does not equal heating capacity of a heating appliance.

In your situation you have a few options to lower fuel usage. you can lower the thermostat temperature, increase the insulation values of your home (windows walls etc), or you can increase the fuel efficiency of your heating equipment. This may be where you get the idea that modulation is strictly more efficient, you are comparing 80% equipment to 95% equipment. That being said you will only get that efficiency if you are able to keep your system temps in condensing ranges.

I would also add that whatever you think is happening when you oversize the boiler and turn down the setpoint, that is not how it works. If you have baseboard heating, you will get the same BTU/h from the emitters at a given setpoint temperature and flow rate, whether the btu input of the equipment is properly matched, or oversized by double. Oversizing a boiler absolutely does not allow you to turn down the setpoint temperature, other factors may allow this, but boiler size is not one of them