Do-it-yourself insulation, mildew repair

Removing Sheetrock first will yield best results

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Q: I have a stucco house built in 1959, and there is no sheathing under the stucco, only 15-pound felt over wire laced between the studs. The stucco is in great condition, but the house, built as a summer cottage, has no insulation. Not only is it cold in the winter, but mildew forms on the walls behind anything near the wall, including furniture and artwork. My questions are:

1. Can we get away with just blowing in insulation, or do we have to install a vapor barrier on the exterior to prevent the moisture from condensing on the interior walls?