The garage is right underneath the house with one exterior wall (concrete wall about 6 feet tall; tested the concrete sidewall for moisture, no moisture found. There is also a window on the side of the concrete wall. Additionally, there are two interior walls (2x4 stud walls, 16 inches on center) that separate the conditioned living spaces from the garage.
The garage is unheated (semi-conditioned, the temperature never gets below 40 degrees in the winter) with a heating duct running to the above bedroom.

Should I build a wall and insulate the concrete wall? If yes, what are the proper layers? I will not be planning on heating the garage.

In regards to the other two interior walls, should I use any vapor barriers with the insulation? If yes, what are the proper layers?

I will be using Type X drywall with Ultra Touch Cotton Bats.

I live in Seattle, in the marine zone 4.

Thanks for you help,
Andy