you will have that siding for many years. First, I would buy a bundle of replacement cedar planks. Periodically you will need to replace some planks due to cracking, hail, and other things.
I would go up and fill those holes with paintable caulk or exterior spackle and re stain them. These are like cavities in your teeth.
I paint allot of cedar plank siding in my area and the best paint I have found is by Sherwin Williams and its called woodscapes, comes in all colors and can match existing colors. You will need to apply the coatings with a spray rig, a cheap waggner will also work. Then surface of the cedar and its absorbtion rate makes brushing or rolling almost un bearable.
I would paint/seal my cedar every three years.
Algea or that growth is very natural. Its not on the east and west because of one reason, the sun. So you need to make sure that the north and south area is nicely ventilated and spraying bleach and water mixture will kill the growth.