Framing a knee wall in front of a half-height foundation wall with windows
I believe you will want to attach 1.5" thick material to the sill plate and have that come out to the top of your knee wall. If you do not do this you will have a dickens of a time trying to adequately attach the reclaimed lumber in a secure manner to prevent it from cupping and warping over time. 

With regard to the windows...why not just use a separate flat window stool at the bottom of the window and use your desired window trim on the left, right and top of the window. There is nothing to say that the apron trim under the sill board has to be a matching trim to the casing around the window. Below is a picture of one such application.



Picture Source