Harry, there are a lot of different thing that you can do and they will be right or wrong in different situations. In Michigan and in a house with relatively decent drainage away from the foundation, I did the wall paint, then 2x4 walls framed as on new construction but with holes bored in all the studs for wiring BEFORE they were nailed together. A pressure treated base plate is not a bad idea, but mine isn't.
Between the studs, I put foam insulation panels. Since they don't absorb water, this is a reasonable choice, I think. Save the fiberglass batts for above ground usage. Over the studs, I put paneling, but don't forget to run wiring and plumbing before you do this.
Some people build a floor to go over their concrete floor. Nothing wrong with that at all, but I just installed outdoor carpet. It's been down over 10 years with no problem. Either suspended ceilings or furring strips and stapled accoustical tile are common for ceilings. A lot of that decision depends on how much availability you need to plumbing and wiring, I think.
Some people have just glued 2x2 studs to their walls. Some go to great lengths to secure the foot plates to the floor. I would not be happy with the first and I just overcut the studs--cut them slightly long--in some walls or drilled and used lead expansion shields on others for the second element. Again, there are a lot of factors to consider and every situation is a little different. What is better in one application may not be in another.