I ripped out some drywall in my 1965 Ranch Brick over Frame intending to install some insulation. out the small part of the wall I checked had no insulation, but the rest of the wall had faced rockwool batts that were very moist to the touch. The drywall in the insulated looks like it's stained dark from the moisture.

The uninsulated area looks like it was installed to replace a window when an expansion was added on that side of the house. There is a 1 inch gap at the top of the drywall, which I'm assuming was left to allow airflow. The gap also allows insects and Anoles to enter the wall.

What is the proper way to insulate this space? Would spray in foam insulate properly while keeping moisture out, or could I just vent the other sections and install unfaced batts? I'd rather install $60 of fiberglass than $250 of spray in foam If I have the option.