Smoothening masonry surface

Your question is concerning two things:
1. Proper fitting (wood planks to masonry wall).
2. Proper wood treatment (anti-moisture).

So that's how will my answer look like. Let's look at this.

1. Proper fitting.
I would advise preparing additional support planks going vertically with - say - 1 meter space (that spacing requires additional insight on how much planks will weight, what wall you got and what kind of bolts you will use; use your aptitude and experience or ask a prO). These support planks will be bolted to the wall on all wood-wall height and have only supportive purpose (don't need any beautiful finishing or something). The spacing also determines if (or HOW MUCH) your wood-wall would deform over time. Shorter spaces mean less visible deformations (in short).
Your proper planks - THE planks you want to see as a decorative - will be attached to these supports I mentioned before. That will make support planks perpendicular to these decoratives. Also, I would leave some few centimeters (or, preferably, more) space from the floor to avoid water to be in contact with planks (due to water from shower or cleaning tools) and to let air circulate between masonry wall and wood-wall. Similiar space would be needed up near ceiling.

2. Proper wood treatment.
This will require appropriate info on what you got in stores - all of these chemicals that render your wood water- and moisture-proof (at least for some years...). On that I advise to talk to some shot helper that seem to have proper knowlege.

EDIT concerning question edit :)

The space between masonry and wood is to be kept, I'm afraid. Here are some reasons:

• it allows air (and often steam) to travel op the wall; moisture has an occasion to evaporate
• using supportive planks lets you not to drill that many holes in a wall (cuz you will connect decorative planks to supportive planks with screws)
• it allows planks to deform, avoiding some of tensions that would lead to look bad/destroy it

I'm aware that it may not look as intended with this visible difference between wood and tiles, but you may try either to neutralize that view or use it to your benefit (better visual effect). You can achieve that whatever you like (covering first line of tiles with last line of wood; plaing decorative hangers and so on...).
Of course, You can glue/attach wood to the wall with some glu-ish adhesive, but I guess that wood will 'work' and deform over time. If, later on, You would decide that any refinishing is to be done, it would be easier to unatttach the screws than tearing down (un-glue) all of them.

I would also wait for other DIY-ers to give their opinions as well. Mine is one of many, and I know it :)

I don't like the plan & only think your plan, which will work fine, would only perpetuate errors. You got rid of the siding, so now it's time to get rid of the trim.

The trim should not be there AT ALL & top rightfully want's off anyway. The bottom entrance should be exactly like the top window. Nothing sticking out & stucco right over the existing top lentil, which is currently covered by the entrance trim.

That trim looks to be just face applied 1x3 enveloped in flashing & should pop right off. If anything goes on the wall, I'd vote for giving yourself an upgrade over the doors. Do a 2' or 3' Awning Roof over the door, just Tapcon & Lag a 12" tall (whatever pitch you desire) triangle cage into the brick mortar (never into the brick) & then Tapcon aluminum flashing over the awning roof's seam to then stucco over.