I'm sorry that you think I'm making snide comments. Actually I'm trying to point out that you're largely giving subjective information based on limited observation and trying to pass it off as fact. I'm a professional in the wood flooring industry, selling, installing and refinishing solid and engineered wood floors. What is your experience in the wood flooring industry? Most prefinished floors have urethane finish, whether they're engineered or solid. Most urethane finished, prefinished wood floors look plastic because of the factory finish application and curing method (unless they're hand scraped or wire brushed). Many solid floors (and some engineered floors) are site finished. They don't look as plastic because there is a different finish application method. Most people, professional or not, would not say that adding a coat of polyurethane to any floor, makes it look less plastic. Most people, professional or not, would not say that semi-gloss finish looks more natural. Of course that's my subjective opinion but it's one based on dealing with thousands of people who own wood floors. Now if you wrote that lightly sanding a prefinished wood floor to smooth out the ripply texture and applying an additional coat of polyurethane looks better to you, I could agree with that. But that's not what you wrote. I agree that adding a coat after installation will help with water absorption but I feel you have underestimated the risks that one exposes themselves to if they do so.

Technically, I suppose if nothing's fallen down, it's not supporting too much...I am in a similar position, when I get a chance I will cut away the offending section and put a small replacement section and shim if necessary. You want to remove all the rotten stuff to avoid mould etc, vacuum up what you can.

There is no product that will install over concrete foundation that will support siding. Normally there is sheathing (plywood or OSB) behind the siding, allowing a place to attach. You cant attach sheathing to the concrete without expecting mold and damage there. This is why you are having trouble getting quotes because you are expecting them to do a job that will fail. You should have them restucco it or you could look at putting faux stone panels (aka stone veneer) there. I guess if you can find a contractor that will do it, they could use pressure treated plywood rated for ground contact and do vinyl or hardie siding to the ground, but you risk termites and water damage as the treatment wears off, that is why I recommended the better options above.

First off, remove the rug (it looks like an area rug) and allow the floor full exposure to "air". Secondly, bring in some BIG (industrial) fans. Get some SERIOUS ventilation over these floors. Do so AS SOON AS POSSIBLE! Because you caught this quickly you can QUICKLY save these floors. You need to DRY THEM OUT. And do it now. Find commercial rental products such as industrial fans/ventilators and get them in there ASAP. Let them run, and run, and run, and run. You will leave them on (24/7) until the wood is COMPLETELY dry. This could be a week or so. Don't skimp on the electricity bill. Let the fans run. It is cheaper to pay another $100 in electricity than it is to rip-out/replace a house full of wood. Good luck. You've caught this quickly. You can quickly get your floors back in order by getting the industrial fans on them.