I have seen this before, with people from the South insisting that clapboard siding is second-rate, and that masonry is always and everywhere to be preferred.  

Add visual height and presence to that same window simply by using 1x4 on the sides (jambs) and 1x8 at the head and sill.Modular LayoutLots of building materials and construction methods are based on a 2-4' module (sheet goods, framing, masonry, finish materials, nailing patterns).

Some areas of the US have deals where you can purchase electricity in middle of the night as long as you have a storage medium (they make special electric heaters with masonry storage for reasonable costs) for a very reduced cost for the electricity.  

Large, transverse cracks are the larger worry, as they are more likely caused by differential settlement in your foundation (the soil underneath a portion of your foundation wall dropping, while the rest stays more or less where you want it - look for a "stair-step" pattern in your mortar joints), water trapping against (or worse, inside) the wall and expanding during the winter freeze cycles, or insufficient steel reinforcement - which is not uncommon with concrete masonry, particularly if the house is pre-1950s (ish). 

The front and back yards had been used as a junkyard, with things like concrete masonry units (cinder blocks) stacked in pyramids, 2x4s throw haphazardly around, pieces of OSB and plywood stacked against trees, and piles on piles of old siding.

@Chris Miller, I cannot really see the bulge you speak up how ever I have a great deal of experience with masonry and brick.

If you have an external masonry wall, which is exposed to the conditioned space of the unit, then you have very negligible insulation and a massive thermal conduit between conditioned and unconditioned spaces.You would be doing far better by your future tenants to insulate this wall than worry about loosing 2-3" of living space or the aesthetics of a brick wall.Where this is a masonry wall - first confirm if it is a single wythe or 2 (or possible 3) wythes of brick (with a air gap/drainage plane between the outer wythe and the inner).  

don i think i just did a basement like this..welli think so..kinda got lost in your post..sorry lol...we used treated 2x4's nailed into block with masonry or tapcons...they were put on the face 16 inches on center..then we cut the dow board, which has an R rating of 4 per 1/2 inch if i remember correctly, into 16 inch X 8 foot strips..glued that between studs onto wall..after that set, we glued another row of dow board onto previous dow board..this added up to 1 inch of dow board, which still sat lower than the 2x4's...even if you need to hit a higher R value though, you can glue a 3rd or 4th as long as it holds..just need to use longer sheetrock screws..using the 2x4's on the faces also allowed us to wire into the wall into the wall instead of running conduit above...just curious, what R value did your inspector allow for the block??

For the exterior the big expenses is that they will require wood windows (at least on the front) along with half round gutters and clapboard siding, brick, or masonry covered walls.  

https://www.hunker.com/13412085/how-to-paint-limestoneThe product will only work as good as the prep work, but I've used Home Depot Behr basement and masonry paint.