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The small holes are one thing, the problems around the window are another, bigger one. You don’t want to just cover up that gap with the trim.
In my last house, I did a fairly comprehensive remodel. That involved removing the existing drywall in most of the rooms. That allowed me to replace the window headers, all of which were essentially non-functional at that point, to replace the insulation with something more effective and run new piping and wiring as needed.
Given that your house is older than mine was at the time, and it wasn’t as well-built, my suggestion would be to demo the drywall in that room and see what you have. My guess is you’ll find all sorts of things. At the very least, It will give you the opportunity to end up with a reasonably airtight room and flat walls and a good finish.
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