Renovate sandstone cellar from outside and inside

Hello everyone,

as always, there are several viewpoints and I would like to hear (read) your advice or experience on this.
I have acquired an older house with a sandstone cellar - one side is underground and therefore damp. Now I want to dig out from outside and protect the wall against moisture with a dimpled membrane.
Now someone said I should additionally coat the sandstone wall with a protective paint, tar paint or sealing slurry, and apply the dimpled membrane on top. My question is, is this statement correct - I thought sandstone should not be sealed?

From the inside, I want to plaster the sandstone and was thinking of using clay plaster because it is breathable and can also handle moisture - what do you think about that?

I want to completely uncover the old floor (various concrete slabs and natural soil) and pour new concrete to get a clean cellar - since the floor is also somewhat damp, a layer of gravel under the concrete is necessary and possibly a membrane as a moisture barrier?

I am very grateful for suggestions.

Jürgen