What you don't want is moisture to seep into the wall and get close to wood inside. I would first establish where the grade should be (disregarding that part of the wall is brick). Mark it out with a chalk line. Extend the bituminous waterproofing (such as what has already been applied to the concrete) to that line, including the brick that will be buried. Backfill and establish a proper grade. I wouldn't worry that a small amount of waterproofing will be above grade in the end. It will be covered by plantings. The scheme of filling a trench with rubber mulch will not work because it, too, will hold moisture which will eventually work its way into the wall. It is waterproofing DIRECTLY ON THE WALL that you need. Forget all the landscape fabric, plastic, etc. This stuff will not do the job of waterproofing. Ultimately, it will be in the way -- probably fairly early on -- and will get torn up, at which point it will become a mess.

I've lived in houses that were on a slope, and agree w/what Logic said, it depends on whether the slope ends at the house, or if there's a drainage swale in between so the lowest point is not right next to the house. If the lowest point is next to the house, drainage problems can cause leaking basements, foundation failure, sinking of one side of the foundation, and water can even come up thru the floor in houses built with a slab on grade foundation. Can also get in vents where builders put vents in a slab foundation. Water in crawlspaces, too. It can be remedied but the best thing is to prevent it by proper site grading and foundation construction. Remedies after the fact are usually expensive; often, the damage has already been done. And yes, Logic is also right that people will conceal water damage. I know of someone whose new house had a drainage problem that led to a basement leak. Rather than pursue the builder for proper repairs they finished the basement so the leaks are concealed. Everything in their basement reeks of mold. They are taking their chances that no one can prove it and sue them when they sell. Stupid and unethical, but it happens. Far too many new homes are built on slopes where you see every house has the lowest point of their lot against one side of the house as you go downhill. Even on a slight slope it can wreck the foundation to the tune of tens of thousands of dollars. Just for future reference to any reader, I would not buy a house with a negative grade unless there was evidence a proper drainage swale and everything else required had been built right in the first place. I have lived in such a house and it never had any of the above problems even with a slope in the yard.

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.

I think your only long term option, and probably the cheapest, to to regrade the yard and create a swale. I would create it on the right of garage (as seen in picture) and run it on the left side of the green square from about the patio? to about 5 feet beyond the back of the garage. It should end so the water drains between the back of the garage and the out-building Assuming the lot drops of to the right from the green square, the swale does not need to be deep. About 8" lower and sloping from the garage. It should drain to the back of the garage, and move the water to the back, to the natural drainage. I suspect you could cut it through the green square, but you would have your leach bed to consider (How deep are the lines) The swale could be create with a sod cutting machine. Cut the sod from about a six foot wide section the length of the garage. Once the sod is remove dig the right three feed down about 4 to 6 inches and stack the dirt next to the garage. once you have all grades correct and flowing correctly replace the sod. I think you could cut it across the drive way, but I think that opens a whole knew set of problems. Also you could run a pipe from the house along the left side of the square, but the swale would be the less maintenance in the long term.