Yes wrapping it in a towel and applying would be the best way. We do it a lot with ice and heat packs just to prevent burns and as well as for patients comfort. 110 degrees would be a perfect direct apply temperature to the body. You also have to remember that you can't apply heat packs (dry heat) to frostbites. Those can only be re-warmed by water at 110 and extremity has to be suspended without touching walls of the container.

The best way to test if patient is severely hypothermic is by touching his abdomen. When body goes into shock due to heat lost it will pull whatever blood it has and keep circulating it thru vital organs to keep them going while the extremities are ignored since too much heat lost happens there. If abdomen is cold that means that you have severe case of hypothermia on your hands. Be prepared to start cpr on sever hypothermic victims. A lot of them go into cardiac arrests due to low respiratory rate and pulse.

Also when treating hypothermia you have to make sure that the air that patient is breathing is warm. It's hard to accomplish in outside environment (without actually doing rescue breathing) but it has to be done to prevent contradictory effect to active re-warming you will be doing on other parts of the body. Also ask the person who you treating not to help you. It causes stale cold blood from extremities to comeback to the body at faster rate which further lowers down core temperature.

Matt