The slab is failing. Putting pavers over a failing slab is adding more weight to a failing slab, and as it continues to settle the pavers will show that settlement. Additionally you have a low spot in the concrete. Any water that doesn't run off the porch is going to sit against the house under the pavers. Did the paver guy say he was going to remove the siding, waterproof, and flash behind the pavers? Or was he going to slap the pavers right up against the siding to help the house rot faster? Replace the slab the right way. It sucks but you can't do what the other guy suggested.

I had a similar situation, except my concrete was under a porch. Every big rainy spell brought water in my basement. Finally got sick of it and took the porch out (it was small and could be moved), got a jackhammer and busted all the slab up and removed it. Then regraded, placed plastic down, and covered with gravel, making sure any water had an escape route. Pavers would also work great. I replaced my sidewalk with pavers as it was all cracked and heaved as well, and tilted toward the house too. I would not use concrete for any sidewalk or patio area by us - the frost heaving does a number on it and then you have one heck of a job replacing it. It takes approximately 5 min to replace or re-align a paver! Mud jacking would work too. But it is pricey. Probably more than going with pavers, but less pricey than removing and repouring with a ready-mix truck and finishing crew. But it would involve virtually no labor or messing around on your part. You should price out all the options. What happened in my case was that frost heaving pushed my concrete up away from the house but heat from my foundation caused much less heaving near the house.

Sorry for the delay guys! Here is my situation - I want to remove the brick and pour a new slab walkway and slope it away from the house as water tends to pool right in front of this step. I want to make the first step much larger and extend it out from the door maybe 4 or 5'. So this means the concrete would be above the bottom edge of the existing stucco. Should I cut the stucco and pour under / behind it and add a weep screed? Right now the joint is sealed with some industrial caulking but I have no idea where the water is going after a major storm... potentially under the house which is bad. Ideas?

You've got some very serious problems here. Horrible detailing between the concrete and house. I'd cut a foot of concrete away from the house, unzip more siding, replace the rotted sill and framing (it's rotted, believe me), and figure a proper detail. You aren't gonna Grace your way out of this.