Looking for advice on insulating between the joists on a 1956 brick and block house in northern Illinois.

I am working on insulating the basement as the first step in completely finishing it. Since the house is brick and block, I don't have typical rim joists - instead I have concrete between the joists on one side of the house and brick on the other. As far as I can tell the wood joists are sitting directly on the brick with nothing in between.

My plan was to install 2" XPS boards to fill the small ledge as well as in between the joists. With a level wall then, I would install 1" XPS from floor to ceiling. I started thinking about moisture in the brick and concrete though and now I am a little concerned that with the XPS, any moisture coming through the brick would have nowhere to go but into the joists. Is this a legitimate concern?

Also, should I look at sealing the gaps between the concrete/brick and joists before applying the XPS? And with what?

I realize this is a very specific question but I would appreciate any input.