[A930Rocket]

If you add blue board to the block wall, you can furr out the wall above to make a flush wall. Personally, I wouldn’t bother furring it out above. It would also affect the windows, in that they would be recessed further in.

Rock wool might be mouse proof, but it has a low R value compared to fiberglass IIRC. It’s more expensive as well.

My .02 is the block wall has dirt against it, so temps are probably stable. Leave it as is it or seal it with Dry Lok or similar inside. Pull the interior drywall down, rewire if you want to add outlets, etc., insulate with fiberglass, add new drywall or maybe some thing more durable (purple or green board ). Paint with white gloss paint.

Replace garage door with an insulated door if needed.

Phase 2: scrape off the old parging and re-parge. It doesn’t have to be pretty. Remove the T1-11, install treated plywood for the first 48”, install OSB or plywood and vinyl siding, add gutters and down spouts. Grade outside to force water away from the bldg.