Waterproofing and insulation questions

My husband and I are embarking on finishing our basement ourselves. We are in the Philadelphia area, so our basement of our twin is made of fieldstone covered with parging. Our entire house, with the exception of the backyard, is surrounded with concrete (so waterproofing the outside is out of the question). The basement is humid, but there is no evidence of water coming in, mostly it seems to just be humidity in the air. I have tried the plastic sheet test, but there was no moisture on any side.
My questions- do we need to add any additional waterproofing to the walls before finishing? I was originally planning on Drylocking (or a similar substitute) the walls before putting up studs and insulation, but is it necessary?
TO finishing the walls, I was planning on using metal studs and the extruded foam boards. Is this a good idea for a basement, or is there something better we could use?
Also, should we insulate the entire basement, or just the 2 walls that are exterior (that do not connect with the other house)?
TIA for any and all suggestions.

 

Welcome to the forums!

Either 10/13 or 15/19 for your Zone, read footnote "c"; 2009 IECC Climate Zone Map - Pennsylvania

A good link; BSI-045: Double Rubble Toil and Trouble — Building Science Information

BSI-041: Rubble Foundations — Building Science Information

Gary