Thanks for the replies, everyone

EXT - I like your answer - I feel like leaving the shingles there
would be lazy...sure, it might not hurt anything, but if I'm going to
go through the time and expense of re-doing the vestibule, I want to
go the extra mile and do it right. Besides, that will give me a chance
to explore the wiring and framing of that wall...

What are the prevailing thoughts on vapor barriers for insulation in
the Northeast (Norwalk, CT, to be exact) - Most things I've read seem
to encourage the use of vapor barriers between the insulation and
drywall... However, I also read that in climates where there is a hot
summer and cold winter (sounds like where I live), it's better to let
the moisture pass back and forth, so no vapor barrier. Who's right?

I have 2.5" of room to play with in the exterior walls - trying to
decide what kind of insulation to install. Foam board, batts, etc...

Oh - one other question - on the exterior walls, now that I've taken
out the old drywall and loose-fill insulation, I can see some light
coming through from the outside...should I seal these small cracks/
holes with caulk, or leave them be?

thanks for all the help!