There is extensive experience with CBS construction--probably 96% of residential and 60% of low-rise commercial--here in the rainy sub-tropics of So-Fla. I'm suprised to find this block construction in NJ, done Florida-style, i.e. without insulation, and wonder how good the local builders are at executing it. But, I believe the OP that the issue IS wind-driven rain. The 'S' in CBS stands for Stucco, and that is the ONLY thing that makes an inherently leaky bare-block wall watertight. What jumps out at me is the OP mentions a "light" coating of stucco. There is nothing "light" about a proper stucco job. It is a THREE-coat process, and the end result is over 1/2" thick. Again, the stucco is the primary water blocking factor. Paint/sealers only enter the equation "down the road", after foundation settling has caused hairline cracks. Proper stucco IS the waterproof membrane. However, in a place like NJ with real winters, the other posters are correct that, rain aside, you probably need to clad the exterior with some kind of stiff insulation and, style permitting, fiber-cement planking. If you wish to keep the stucco look, there are EIFS systems that can be stuccoed-over. The EIFS systems typically include features that allow exterior condensation to drain away... make sure the stucco guy does NOT clog these.

IF the block is in great shape, you can tile directly over CMU. Depending on other issues, it may be prudent to treat the wall prior to tiling. Issues such as climate (moisture drive), location of wall (below grade or above), any structural issues (cracking, etc). For a basic generic CMU wall? Decorative tile on a dry wall? If the CMU is in fine shape, no issues, cracks, no hydrostatic from behind, yes you can tile directly on it. It may be easier to skim coat the wall first to make the surface uniform and flat. Then tile over the skim coat. If it's a wet wall, a shower, etc, then use a waterproof membrane before tiling to prevent the CMU from absorbing moisture generated within the wet space. Again, probably best to skim coat the wall first. Then apply the waterproof membrane over the cured skim coat. Then tile over the cured membrane. IF there are any structural issues with the CMU, it would be best to apply a transition material as you go from CMU-to-tile.

I totally agree with Sophie. The blocks and existing footings are likely a poor foundation for building on top of and it would be a huge stretch to describe this as a repair. Do yourself (and the rest of us) a favor and build new, out of the flood zone.

show a picture, including some surroundings. You'll need to leave an unfilled gap. But probably the better thing would be to disassemble a couple of sections of fence, construct the retaining wall and install the fence on top of it.