I live in a '50's house that had a severe leak this summer with our 14 plus inches of rain. I learned lots because I had to.

1. If we just seal the cracks, what happens to future rains that fall on clay soil with homes so close together? >>>>>>>>>>>Sealing your cracks will do nothing to stop your problem. (been there, done that).
2. Do we attack the outside and put in a drainage system only (fixing the grade on 2 sides as well)? >>>>>>>If you get estimates from people who install sump pumps, they will tell you that this is the only way to go. It MAY fix your problem, but it is not going to fix what is causing the problem (water coming in from the outside). If you get estimates from landscaping companies, they should give you a detailed estimate explaining how/why what they do will work. In general, you have a problem on the outside that needs to be fixed. Re-grading should do the trick.
3. Do we add exterior drainage and improve grade AND seal from the inside?>>.>>>No.
4. Do we need to pour new concrete in the basement? Can we get by with just patching the cracks? If new concrete is needed, how do we deal with the transition from unfinished to finished floor? Yes, new drywall walls are in place. No. I discovered by talking to a contractor that I trust with my life, that when these older homes were built, the walls of the basement were put in first, then the flooring was poured. Companies that built them, probably used watered down sealer, and it is now worthless with time. You also have a crack around the edge of your basement where the floor and wall meet, that's where your water is coming from.
5. What kinds of companies deal with this? Now that it's Dec. 1 and we're in the Chicago area, do we deal with this now weather-wise or do we wait til spring? I would get three estimates from a landscaping company and three from a company that installs sump pumps, just to get started on educating yourself. Sump pump companies will try to scare you into getting one of these things, but they are not in my opinion what you need. Don't be pressured into signing a contract or anything. Also, research the subject to death.

You may also have improper gutters and down spouts (that I discovered are just as important as gutters. My house had both that were to narrow for the roof.

Additionally, if you have very large bushes, trees, etc. planted along your house, the roots dig into the ground, and when it rains, the water follows the loose soil along the roots. A landscaping company should tell you what to do with all of this. Don't say anything, just ask them how they intend to fix the problem.

Good luck!

SG

Thanks Spiritual Gardener. We will be contacting landscapers and plumbers to start learning. The water isn't coming in where the basement walls meet the floor - it's only coming up through the cracks. The last time it happened it made the crack lines wet but didn't cause any basement flooding. It was just enough to be a mile bother - nothing was damaged. I had no idea about the tree roots and water passing along their channels. We do have a maple tree that some previous owner planted wayyyyy too close to our house. It's a gorgeous tree but it is about 1/2 way between our house and the south neighbor's house. There's absolutely no need to worry about us signing contracts prematurely. My husband is cheap and Iam the type to identify the correct solution and I'll over research before I commit to spending (plus we just had to buy a car so money is tighter than normal).

I appreciate your insight and will keep our learnings posted.