What I got must be cleaned with a PH neutral cleaner and does not stand up well to lots of moisture.

My Concern is there is clear proof that the first floor ceiling had a 4 x6 ft repair as Seller claims is from AC Blower replacement causing issues.The last Home inspection cleared the Townhome had no moisture in a couple of places where previous inspector suggested wet spots because of poor job (ethernet cable from exterior to a bedroom) and HOA related issue.This townhome also has various sink rust related leaks and caulk based fixes. 

I am especially concerned about mold and rot risks from moisture getting trapped between the layers of siding, and having this damage the structure.My final question is whether it would be worthwhile, over the course of the summer, to re-side the house so that there is no layering involved.

Make sure all windows work properly, make sure all doors work properly, check for potential foundation issues and moisture issues with professionals not just the inspection guy.

@Colleen F.When you buy pressure-treated dimensional lumber in Arizona, although it might come out of the same mill (it doesn't, usually), it is typically not the same wood species and it is typically not kiln-dried to the same moisture level as it is in Little Rhody.The wood species that deal best with the higher levels of dryness are more resistant to the pressure-treatment process compared with others.

They might recommend installing a drop ceiling or dry-walling over the existing ceiling to seal it in because bathroom paint is prone to peel because of the moisture present.

Bringing outside air directly into the space without conditioning it may cause thermal comfort issues or worse, introduce moisture and an increased potential for unwanted bacterial growth. 

That was fine.If you're worried that the plaster doesn't go all the way down to the floor, that was normal in these walls, just as it's normal to leave a gap under drywall, and for the same moisture-based reasons.You're going to be fine once you install the new baseboard, but as you can see, trim carpentry is a lot more demanding on walls like these versus modern drywall.

Some details I would like to use would be using concrete piers and slab foundation to prevent moisture issues from water run-off of mountain.

I would just order as needed.Here in socal, I have tall fescue grass, and I like to grow it long during the hot summer to keep the soil moisture and shade, and to help prevent weed overgrowth.