Most of the heat is probably spreading by convecting hot air, not as thermal radiation. A good chimney seems like it should be more effective, though it fundamentally still can't stop the fact that you're converting quite a bit of electricity into heat.
There will be some loss, but the heat trapped in houses wasn't going anywhere anyway. By putting it outside the home, there is a more direct pathway for it to be leaving the city. Though I wouldn't know how to quantify this by any sort of approximation, I assume it's less than the heat added from inefficiencies yeah
I wonder if it means that during the daytime, the cities are hotter but at night, the average temperature is cooler than before? Since all the heat trapped indoors has been pushed out into the world.