All interior drain systems should work...but there are defintely better systems out there than the traditional 'drain tile' systems. If the walls are an eye sore, I would find a wall system that is appropriate for the basement environment and that achieves the look you desire for your basement. But ground water leakage into the basement needs to be addressed first. I would not waste the time & money on paiting anything on the walls. The same thing will happen a few years or less down the road! I think a dehunidifier is also a great idea. Re-routing the gutters should definitely help, but may not get rid of the problem completely.
Also, when dealing with block walls, you should determine if you have a monolithic foundation or not. This is important information concerning the type of drainage system you should have installed. If you can see the full 8" block at the bottom of the wall, the you have a monolithic foundation and you should not have anyone jackhammer the perimeter of the foundation inside your home. The floor and footing are poured as one piece in that case, and you don't want to crack your footing!
A special system that gets adhered to the top of the concrete floor against the walls is the right answer in that case. The best one I've seen is called DryTrak.
If there is less than 8" of the block showing, then it's not an issue at all. In any case, make sure you have a good, high quality sump pump system to get rid of all that water.
I take it you believe it's better to let the water in and pump it out rather than preventing the water from getting in .