I have started a re-siding and insulating project on my 1960’s ranch style home. Most of the home will be re-sheathing with ZIP-R and insulated with R15 Rockwool Comfortbatts. We have started the project on the east side of the garage and are working our way around. we will also be installing a new front door and windows when we reach them. Slowly chipping away at the project might not be ideal, but this will alow me time to focus on other projects and the family. 

Now the problem: I have started the process of pulling off the brittle, loose and cracking vinyl siding on one side of my home and have started working my way around to the front door. I noticed that between the front steps and the wall the builder left a 2.5in gap that was filled in with some blocking and “sealed” with calk. What do you think is the correct approach for this? flashing? fill the gap? 

Behind the wall is my water heater, so I have access to both sides easily. If its possible, I would like to stay away from pulling the stairs out. 

thoughts?