Becky – if you are getting any moisture on the inside of a wall, you must get that resolved first. Trying to cover it up or mask it will come back to haunt you 10 fold.
If the ground outside is collecting water or holding it against the structure, that has to be fixed first. If you don’t have gutters, and the water is coming off the roof and standing, you may want to consider putting them up. You will still have to pitch the soil away from the structure. If it is on the interior, pulling the molding and seeing what you have is in order (you want to do this to put the floor in anyway). Whatever the case, the water is coming in and with it mold, mildew, and critters – it is compromised. Holes do not get smaller on their own – they get bigger.
Filling a crack in the floor of what was an exterior and now interior wall doesn’t make the water go away, it is still there. You have to find out where it is coming from, stop that, let it dry – then fill the crack.
Not fun but it is the only way to keep it dry.
-- Love woodworking and fixing most anything
