I would rather that holding the mouse button down in Dragon form fire almost as rapidly as rapidly clicking - if not exactly as fast. If that runs the risk of overheating, so be it. I am glad Larian put in the option to hold the button down, but adding the holding for continuous fire didn't really improve the experience much because rapidly clicking is basically still always better.
Researching the Scales of Steel upgrade improves the Dragon's survivability to actually reasonable levels. It still takes damage pretty quickly if you fight the wrong units, but you at least can fight for more than 3 seconds without dying. I think that the armor level for Scales of Steel should be the base level of the dragon before upgrades.
EinTroll - I'd also like to participate in those kind of experiments.