You have asked several questions at once so a little difficult to give you the answers you want.
First, Hardy backer board is a newer, lighter, substitute for concrete board and usually used in bathrooms and under tile installations. I have never seen it used on exterior walls as a sheathing.
Second, the huberZip system is from Advantec. I love Advantec sheathing and subflooring. I'm sure it does what it says, but it is pricey compared to OSB sheathing and tyvec. Selecting a product because of price is not what we do here. An OSB, or any T&G exterior sheathing with properly installed and taped Tyvec or a house brand wrap also works very well.
Third, a true vapor barrier is installed on the heated side of the wall studs, not under or over the exterior sheathing. the wall cavities and insulation must have a a way to breath. They will breath and excessive moisture should escape through the exterior siding. Tyvec is not a vapor barrier, it is an air penetration barrier, just like the new Zip system. they both stop liquid water infiltration, but water vapor is a different story, it must be able to pass through. On wet, foggy or very humid days, humidity gets into the wall cavity, the vapor barrier keeps it out of the living space. When the weather conditions are better, the moisture migrates out of the wall cavity through the siding, thus drying the wall.
I hope this has answered some of your questions. Good luck on your project.
I'm with your painter. It's like throwing out a pair of Allen Edmunds because there's a hole in the sole and replacing them with a pair of Timberlands.
Find out what it would cost to repair/replace the split boards. It'll probably be cheaper than redoing all the siding in a new/cheaper material. In addition you might lose some value in your home by removing the redwood siding.
Have the insulation contractors blow the insullation from the inside. Much easier to repair drywall and you don't have to worry about poor repairs causing water infiltration.
Maybe find a better contractor all together. Some people just do what they know and they may not be familiar with other materials and methods and they wind up talking you into paying more in time and meterials to do things their way.
I was just talking to someone the other day about their garage door. They used to have a very nice wooden garage door but when they got an automatic garage door opener installed they were talked into replacing the door with a poorly insulated metal one. Something about the opener not being able to handle the weight of the door. This was for a single car garage so that shouldn't have been the case. Anyway point is... This was many years ago and they still regret the decision.
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I have two small areas of solid cedar. I used a natural/brown stain and a sealer. It had to be resealed every 3 years to look good , every 5 years just to keep it from bleaching. The same time I built a shed with cedar plywood and painted it ; it is still good after 15 years.