Some thoughts on this. For information, the most useful picture of the Demologos I've seen is
this one from a naval history site which seems to be more or less contemporary and gives a clear description of her layout.
However there are some obvious problems with her design. Firstly, there is the central mounting of the paddle wheel, which is indeed helpful in terms of protecting the wheel itself, however it does mean that the boiler is on the left of the wheel and the steam engine is on the right - which means that somewhere, not shown on the plan, is a large pipe carrying steam from the boiler to the engine across most of the width of the ship. I hope it doesn't need to be explained what a critical safety risk this is. One stray cannonball - heck, one good sized wood fragment from a hull strike - and the steam pipe is breached and she's dead in the water.
Secondly, she's not going to be that manoeuvrable - the problem with a single centrally mounted wheel is that you can't turn her by applying differential power to the wheels the way you could with a side mounted paddle steamer, you're going to have to rely on a rudder. Which means that, with a top speed of only 5 knots she's not going to be outmanoeuvring the blockade ships in anything other than a flat calm. (How often is the sea dead calm around New York? I'm guessing not very.)
Thirdly, heated shot isn't a wonder weapon. For starters, it takes several hours to heat a 32 lb ball until it's red hot - which means (a) you essentially have to start heating it the night before and (b) once you've fired off your first lot of shot you won't be getting more before the battle is over. Now you can't tell from the pictures just how big the firebox is, but I would be very surprised indeed if it could heat more than dozen balls at once. Once they're gone Demologos is firing normal shot the same as her targets. And this is ignoring the fun the crew are going to have carrying red hot shot to the gun deck. Up a ladder (the firebox is below the waterline), In the dark, with smoke and steam everywhere, and probably with the ship rocking unpredictably from wave motion and multiple impacts...
No. Demologos needs a very precise set of unusual circumstances to be an effective threat, otherwise it's more likely to be a danger to her crew than the enemy. I suspect the USN knew what they were doing when they had her on active service for a grand total of one day before laying her up.