Thermally modified wood siding is becoming popular. I’d do a search on that. If I had to guess it is quite the premium product. More on reddit.com

A picture would help out a lot. I’m thinking your talking about “lap siding” which comes in standard sizes that are easy to match up. Look on to replacing with hardy board. It also matches lap siding but will not rot. More on reddit.com

I'm in the desert southwest, so I don't deal with siding much. That said, when I lived on the East Coast, I liked vinyl for its ease of install, simple cleaning, no need to paint, etc. Oddly enough, I'm currently doing a job which is 100% Allura siding. So far it looks pretty good. There are very specific installation guides in respect to flashing details, nailing, expansion joints (the product doesn't expand and contract, but needs gaps to not buckle as the building moves under shear forces) and you need specialized blades and drill bits to cut it and make holes for penetrations. For a DIY homeowner, I think Hardie or Allura might be a bit out of reach. For a pro, it should be ok. Either way whoever is installing should have another set of eyes double check the install, flashing, etc. It's a more involved install, and requires paint, but looks a little bit more refined than vinyl, which does have the disadvantage of looking more low-end. More on reddit.com

Restoring the wood siding is a very laborious task and you most likely have lead paint under layers of newer paint. The old oil based lead held up well but was toxic. Getting the newer paint to bond over the old without sufficient prep causes peeling and poor bonding. If someone blew insulation into the walls that also would affect how moisture is held in the walls. There are many reasons why your exterior paint has failed. The cheapest fix is vinyl. If you go vinyl look at their work and decide if you are OK with how they handle trim. Vinyl installers run the gamut from sloppy workmanship that removes all vintage trim to more thoughtful careful installs. Installing hardi will seal the exterior better, and look crisper but again look at the installer's work to make sure they are following manufacture's guidance. Hardi can come prepainted and then installer uses colored caulk. I prefer not to use the prepaint but just the primed hardi and a good paint job after the install. Hardi done well will hold paint for 15 to 20 years and is much more attractive than vinyl and will keep out the wind. But it will cost you more. More on reddit.com