I can't answer ALL of your questions, but I can comment with some experience as my Grade II Listed welsh cottage is at least 250 years old.
Yes that's correct, the walls need to "breathe", unfortunately many people (including so-called builders) don't understand this need, so that in the past all sorts of incorrect attempts were made to combat the issues.
Other things need to be investigated:
What is the outside like? If bare stone, are the gaps between rocks filled with a soft crumbly material (original), sand & cement mortar (totally incorrect but very often seen, in future, 'tibvos') or a very hard pointing (modern hydraulic lime mortar). If it is painted, is that lime wash (creamy-white-ish), or masonry paint (tibvos).
What is the internal render? Should be bare stone or LIME plaster, not sand & cement render or gypsum plaster both of which are tibvos.
What is the floor (and skirting board if any) like? Where signs of damp, are these signs all the way to the floor and into it? (Any sign - a row of drill holes about 8" up - of chemical dpc being installed? Tibvos).
What is the ceiling like? I'm going to suggest (but don't quote me, this forum is a collection of opinions only) putting a beam on the floor (over dpc but not screwed down), a beam across the ceiling (which could be fixed, if ceiling has timber joists), then wedging the vertical studs between these two horizontal plates. In this way, studs are not screwed to the wall (the screws may eventually corrode) so no transmission of damp. As for insulation (which never existed 250 years ago) I would cut PIR panels wedged between the studs & noggins, then plasterboard over the top.
Stopping there for now.