Are you sure the "Water Seal" you refer to is an oil based (requiring a petrochemical to clean the brushes and NOT soap and water)? Is it "transparent" and has no color listed or shown on the can? There is no need to "strip" or "sand" the Thompson's Oil based TRANSPARENT Water seal Product because the paraffin soaks into the wood and is not on the surface. It has no pigments in it that rest on top of the wood. Therefore there should be no "peeling" or "chipping" of the surface and no obvious wear other than wear to the wood itself, usually near stairs and door and very slight in most instances. If its the Thompson Oil Based Transparent product you used, there is no need to strip or sand. You may want to clean the surface (IF it is visibly in need of it) with something like diluted Clorox Exterior house cleaner to remove pollen, dust, dirt and any surface mildew (mildew spores are transported by the wind and there is always some on the surface, although it probably hasn't "stuck" to it. Its basically a spray or brush on job and rinse with a garden hose. Let it dry fully for at least a day (two is better). then you can apply your new oil based deck product. I suggest you wait at least one full year for the beading of water to stop and even two years is OK. My front deck got the Thompson's two years ago and I will stain it with an oil based stain this year. It requires minimal cleaning....I may just use a garden hose with a firemen's nozzle. The deck gets full sun all morning so mildew is very hard pressed to survive there. Best stain, IMO are oil based TWP. The main thing to watch for is to avoid "soap and water cleanup" because that is a water based, possibly latex deck product. You wouldn't think to put latex paint on your indoor hardwood. Latex wears like crap to foot traffic. A true stain soaks the color deep into the wood and is not a "paint pigment" that sits on top of the wood. The whole problem with deck preservation has been caused by the VOC controversy which tossed a lot of good products out of the market by legislation. The emphasis on water based products opened the door for a lot of "new" water products with "paint stains" which are not stains at all. Unfortunately, those products require stripping because they wear out fast, leaving some areas bare and have adhesion problems as they age. Stripping is more work than the refinishing. ALWAYS google the Material Safety Data Sheet of the product you are considering so you know exactly what it is. Be careful that most big box stores sales clerks are "selling" what the store has in stock. That is why they get paid. The best products used by Contractors are available through building supply vendors that cater to builders and carpenters and not the general public consumer. They do not refuse to sell to the general public, but "quality" is their life blood, not quantity of sales based on huge purchasing contracts supplying a nationwide chain. Wish you good luck. Don't be swayed by the claims of 6 year and 10 year lifespans. If its a water based paint pigment product, it will look like hell for half of those claimed "lifespans", Most people would prefer a true stain that can be reapplied easily without having to strip the deck. And. if you have to strip the deck, how do you strip the railings and balusters? I've done it....took a pressure washer and two days to complete. Then I started reading and wised up on the number of really crummy products that are available, being pushed by big box stores and consumer agencies that prioritize water based over oil because of an "environmental" bias. The idea behind using an initial Thompson's Oil Based Transparent on a new deck comes from a highly ethical, lifelong contractor/carpenter who needed a workable solution for customers who couldn't decide how they wanted there decks treated during an age of great confusion. The Thompson Transparent has an effective anti-fungal and gives good service up to two years. When you compare to other oil based products costing three times as much, many of them also recommend restaining after two years. BTW, oil based paraffin products do not support fungus.

"For the stucco cracks, can I just use caulking to fix it" No, it will only slow down the penetration from the cracks. The damaged underlayment/flashings need to be repaired in order to keep the area's framing dry. Stucco, or hard coat in your case, isn't waterproof. It's the underlayment/flashings/drainage plane that keep the wall/floor cavaties dry. It doesn't take physical water,(rain, sprinklers, leaks, etc.), for your framing to get wet. It can be from condensation/ moisture build-up behind the cementious coats. That's why it's important to have what's behind the coats in good working order to keep moisture or physical water out. These days, most underlayments for traditional stucco are double plyed. With single ply underlayments, the scratch coat attached to the undelayment can cause moisture build-up behind. The two ply application is geared for the second ply to catch that moisture and allow it to run down and out the weep screed,( drainage plane). Your best bet is to have it repaired by a reputable, experienced outfit. Another avenue would be to get estimates on an elastomeric or acrylic top coat, but in order for that to tie in right, it would be a whole house application. Someting to consider if you were thinking of re-coating anyhow. Elastomeric top coats remain flexible in temperature changes meaning virtually crack free finishes, and is way more water resistant than traditional stucco or hard coats.

There is an exterior siding stain identification guide to help identify stains in some cases and the cause of it. Brown Stains – Long streaks of brown stains on exterior siding are often the result of rusty nails. However, if the home is old and has cedar wood siding, brown staining also might be oil residue from the cedar wood caused by water getting under the shingles. If it’s a reddish brown stain, it could be the end result of an ice dam over the winter season. Black Stains – Black stains are usually caused by a form of algae, mold, or another type of fungus. It’s often found on the side of the house that doesn’t get much sun to dry moisture from wet weather. However, black staining also could be a result of soot, particularly for homes near industrial areas where wood-fired or oil-fired chimneys are in use. Green Stains – Green stains on exterior siding stem from algae or moss growth. It tends to grow on the siding where the right mix of sun and moisture exists and there is inadequate ventilation. Yellow Stains – Yellow stains on siding are commonly caused by deteriorating insulation or sheathing behind the siding. Water Stains – Water streaks or stains in the same color as your siding are caused by gutter problems. If the gutters on your home haven’t been inspected lately or are old, they could be out of alignment and be causing rainwater to flow behind them or the siding.

You don't have a 'cheap' option here. We MUST assume SERIOUS water damage to anything sitting underneath that balcony. You will need to open up the balcony floor to expose ALL the wood underneath (you might have to look underneath the siding as well). You will have to open up the garage ceiling as well. You will RIP OUT and REPLACE all rotten wood. All of it. Every stick. Every piece. Railings included (if they are wood and they are rotten). Everything gets resheathed (exterior plywood) and rebuilt. The finish is the last thing you look at. It will take up only 20% of your budget. The rest will be the rebuild. And what are the ROCKS there for? Are they 'holding down' the edges of that material? How long have they been used for?