Please help - possible wood rot and mice coming in.

Hello,

I bought my first house late in the spring and I just noticed an issue. I have noticed mouse droppings in our basement with some insulation coming to the ground from the little space between the foundation and the floor.
I did some research and I figured out where they are coming in. Outside the kitchen area of the house was extended a little bit at one point in time. Up underneath this extension between the foundation and the end of the extension is where they are coming in. Under the overhang of this extension is long wooden boards running, and it looks like there is cracks and a hole, possibly from snow getting packed up under there and rotting it.
The hole and crack look like they were patched up at one point but I would like to rip all of these boards out and replace them..
My question is what kind of wood or materials should I use when I replace this? The dimensions of this are Length - 15'9", Width - 1'5" and height from the bottom of the wood to the flooring in the house - 9". I am going to have to dig up the ground a little because it is so low. Can I use screws? I don't believe I would really have enough room to swing a hammer. What kind of insulation and plastics should I use to help block out the elements? Are there any other specials materials that I should use or would help?
I am really dreading pulling this wood out because I think it is going to be a real mess in there. Sorry for the long post.
Please review the pictures and let me know if you have any questions. I appreciate it!

Thanks

 

Does anyone have any ideas on how to fix this up the right way and secure this? Any ideas or tips would be helpful. I would like to only redo this once, and do it the right way.
The first picture is of the overhang of the house, and the rest of the pictures are from underneath it. Please let me know if there is anything else I should clarify.

Thanks

 

IMO that's a bad design, I don't know why anyone would have an overhang like that so close to the ground. I suppose it isn't feasible to dig down to the frost line, pour a footer and run block up to it.

Assuming the grade and block stay the same I'd use PT plywood for the covering. Make sure the screws/nails are rated for PT use.

 

Thanks Marksr. Yeah I agree that this is a bad design. This is in Minnesota so we get snow, leaves and all sorts of stuff that can fill in this area.
Your recommendation of replacing the area with block is a good one. I can dig down to the frost line I believe.
Let's say I do go with the block and run it up to the bottom of that overhang. Would I still just do the PT plywood underneath or would there be anything special or different I would have to do with that (being it will be butting up against block now).
I appreciate the advice. You have me thinking in a whole new direction now.

 

I'm a painter not a carpenter or mason but I think just using the PT plywood over the block would be fine since that block won't really be supporting anything.

 

It looks like a cantilever that just wasn't finished very nicely on the bottom. You could cover it with a sheet of fiber cement siding, or a piece of 3/8" PVC Azek sheet, going right over the top of what is there. You might have room to get a pneumatic crown stapler underneath there. Otherwise a palm nailer would work well.