Fixing a old wood wall
In my opinion, I would put the wall back as it was.
Part of the whole charm of the barn look is the roughness, textures, cracks etc., the things that sounds like you want to fix. Even if you could get an "upscale" barn look by doing what the questions surround, would severely change the look you have now.
Gluing cracks will change the color of the wood, it will run and drip. Mixing sawdust in the glue will leave a mess on the surface, it never goes in the gap clean, and will require sanding. The planks have a great patina. Patina (aged look) is a color that can only be achieved by time, and is highly sought after. It can be faked, but is expensive. Sanding this patina will remove the saw marks and the patina and pretty much render the wood to an almost new condition. IN doing that you would be better and simpler in some ways to just install new wood planks. Shiplap is a big trend now.

When the appraiser discerned the type of building you had, there was no way to know how cut up the paneling was or what condition it was behind the drywall. One could only hope it is in good shape, well enough to salvage. What I see is where a window may have been filled in or a repair made a long time ago, or perhaps the builder ran short of material, or changed their mind about having a window there. It happens all the time.