Ok, this may be a bit long winded, so bear with me:

I am renovating a house we have recently bought and fixing many many of
the previous occupant's 20+ years of "fixes" and additions. The
current problem is, he has built an addition onto the house, but the
addition is built on top of part of an outdoor deck. Two of the Three
walls sitting on this deck are flush with the edges of the decking, but
the deck extends under and beyond the third wall. The bottom of this
third wall is rotten, most likely from rainwater getting between the
deck boards and the wall. I can put some temporary jacks under the
wall (bearing the load from the roof rafters) and replace the rotten
studs and plate, but two problems still remain that I think I have
solutions for and want to see what others think about them:

1) the sheathing looks like it's not in great shape, not as punky as
the 2x4's but not great, I'd like to just seal it up with a resin "wood
hardener" that is available (I've seen it by Minwax, but I'm sure
others sell it too) instead of having to rip off siding and sheathing
and goodness knows what else. Anyone ever try this and does it work?

2) I'm thinking of cutting a 1/4" or 1/2" gap in the decking flush with
the edge of the wall (outside). It'll probably mean having to put a
pair of joists on either side of the cut (the joists run parallel to
the proposed cut). If I did this, put flashing under the plate, gob
the heck out of it with caulk - what do you think?

Thanks in advance for any thoughts/advice.