Tile – What type of exterior siding tiles are these

As long as you make sure that the wood is isolated from the source of moisture as much as possible (or better still remove the source) then any decent quality wood properly primed and painted should be OK.

I would also consider getting the wood treated first.

Before going through the waterproofing hassle, do check your gutters again. Even though it's the gable end, you want to make sure your downspouts elsewhere are carrying the water away from the foundation as far as they can.

Then, check the slope of the ground. Is it sufficiently sloping AWAY from the foundation? If not, fix that too.

After that, if you still have issues, if you're going to be digging out the foundation, you definitely want to consider a drain tile system while you're down there. That typically has to go near the footer, so be careful doing that (you'll likely want to consult an expert before digging out the footer.)

At that point, the typical waterproofing system is some form of a rubber membrane then covered with dimple-board. The dimple board protects the membrane from the backfill and also acts as a drainage plane into the drain tile system.