Hello all - remodeling basement in 100+ year old Seattle house. Basement was 'finished' when we bought 15 years ago - though musty, and generally not well done - nothing really square or plumb. Now we're tearing into it to create a 'mancave' for the teenager, his friends, guitars, etc.

The issue is insulation. I've read extensively on the buildingscience.com website and am trying to hew to their recommendations as closely as possible.

A couple issues:
The wall construction is concrete wall at varying height - it gets lower with the grade, from about 6' at highest to about 3.5' at shortest. There is a 2x6 pony wall of similarly varying (inversely) height atop that.
When the house was built, 1x6 shiplap was attached to the inside of the 2x6 pony wall, and on the outside, metal lath directly on the 2x6 wall, with concrete stucco. This construction had degraded over the years and had allowed water in/trapped water in numerous places resulting in sill plate rot. I've removed the stucco all around, and replaced the compromised sill with new treated wood and a gasket, and replaced studs as needed. Outside is now clad in 1/2" plywood, building paper, and soon, cedar shingles. My question is how to insulate the pony wall.

I'm adhering 1.5" XPS to the concrete, to avoid condensation. (Previous 'finishing' was no insulation, and internal 2x4 wall up against the concrete wall - there was rot in places on the floor, and mold, though I think this was ground water - and I've regraded the outside and added a French drain, and injected urethane foam into some cracks).
I plan to frame internally with 2x4, and use unfaced fiberglass in the stud bays of the new internal framing.
I think I want to spray foam the band joist space to 1-2"; there will be additional fiberglass behind that - we're adding radiant tubing to the joist bays for the first floor, there will be insulation below this, and I was going to turn the batts up at the ends, behind the new spray foam.

What is unresolved is the 2x6 pony wall. In reading here and other places, I'm thinking a layer of foam (1"?) on the inside face of the 1/2" plywood exterior sheathing, followed by fiberglass, or just fiberglass? Should I insulate the pony wall, and not the internal framing? I'm thinking that the goal needs to be suitable total R value, though keeping the fiberglass from reaching dewpoint of interior air, and thus condensing, creating mold-growing potential.

I'm really hoping Dana responds to this post!