Thankfully, my brother owns an excavating business and he'll be doing significant dirt work to alleviate this issue-he said that since the water would come and go and dried in between rainstorms that there is no significant water damage to the house or foundation, but the siding all around has taken a hit.

Some wood rotting on a bottom outside corner.I figure some things are just normal. 

Yes we have very hot and dry summers.

Large boulders, dry riverbed, mini-canyon, cacti, drastic elevation changes?

Just gotta hustle a little harder when deals dry up.

If it were cut and dry the answer may be yes.

Turns out, they have bid on this job before and had concerns about dry rot and construction.  

I just don't think its a cut and dry decision to make.For what its worth - I will not allow my parents to touch a dollar of what's to be paid back.

Wood rots fast here.

The damage seems truly small, so I intend to fill the cracks, let it dry, and carry on.Here's my newbie question: what do I seal it with?