Are you in the city? country? high fire area? We did stucco on our house due to high fire area. (CA mountains) Also code restrictions. Here in ND we have steel siding due to extreme weather and hail and storms.

Because the joints are not sealed, vinyl siding has a very high permeability rating over 40 perms (similar to the wood siding) so it is unlikely to trap moisture long enough to damage the old siding (I assume it is painted). Another issue is whether to put house wrap behind it which might further slow the drying of the wall to the outside. But we don't know the climate or the kind or amount of insulation so I won't try to guess. If appropriate for the wall design, you could use a highly permeable house wrap like Tyvek behind the vinyl siding but only if the old siding is painted. For the vinyl siding to be level it should be installed on a level surface. That can be achieved with reversed shingle or clapboard shims or vertical strapping but the floating vinyl may be more susceptible to damage, but I don't have first hand experience with that. It might be better to remove the old siding. You should also carefully consider how to detail the openings, facias and corner boards.

Both would work for a modern looking home and both are good products. I suggest reading and understanding the installation procedures for the reasons of maintenance and cost and definitely have the builder do the same. Good luck!

Staining the cracks will do absolutely nothing for the wood to prevent cracking. Cracking is common, it's normal and there isn't a thing which can be done about it, The thicker the post the more it will crack and the lower the density of the wood the deeper the cracks will go. Red Cedar is the second lightest wood next to balsa so of any wood used cedar is the one that will crack the deepest. Staining will help repel water and block UV rays from the sun but won't stop cracks and the best stain ends up being just a paint. Your timbers will never stop moving and the checks will open and close as the outer layers of the timber pick up and shed moisture. Do NOT try to fill the checks with epoxy or something similar. it will make it worse. Why people buy and use these expensive timbers thinking they'll look the same as new is a mystery to me but I'm sure the builder didn't tell you what to expect. The UV rays destroy the woods lignin without extensive UV protection and in 10 years time they look like old nasty tree stumps. One things for certain, it won't be soon before you end up painting the posts to cover up the ugly and the reason you bought them in the first place will be lost, but will still have the cracks. Best thing for posts isn't a solid post but a box built around a 4"x4" or 6"x6" treated post using 3/4" treated lumber, or even cedar and stained the color you want. You'll rarely see big funky checks because the outer box is thin wood which will dry easier with less movement.