if you have several reasons to replace the drywall, then by all means
go for it. it's hard to say whether it makes economical sense. if your
house is drafty, then you'll gain comfort and satisfaction which are
valuable above and beyond the economics of the job.

i gutted and reinsulated the last house i owned. i firred out the 2x4
walls with 2x2's so i could fit an r 21 batt. then carefully detailed
the vapor barrier--taped the seams, caulked the top and bottom plate,
caulked the vapor barrier to the floor as well.

i would question the value of plugging nail holes in the sheathing.
where you want to stop air is on the warm side of the wall. true, too
much ventilation can lead to heat loss by what is known as wind wash.
that's when cold air blowing over insulation strips the heat out
similar to how it feels to wear a fleece sweater without a wind breaker
on a windy day. but i think it takes quite a bit of air movement.
nail holes from vinyl siding would be pretty minor.