Wrapping the exterior with 2" of rigid foam will prevent thermal bridging across framing members (up to 20% of the wall area!) and is well worthwhile. If you tape the rigid foam you'll also have a tight barrier against air penetration. A combination of 2" of foam on the outside of the wall and blown-in cellulose inside is a very cost-effective solution that will perform better than flash and batt. If the "flash" isn"t thick enough everywhere you can get a condensing surface inside the wall, which is bad. Cellulose is only corrosive if it's wet, and if your insulation is wet you have bigger problems than corrosion to worry about.

Probably the most economical "high value" residential insulation consists of 2" rigid insulation (joints staggered and exterior joints taped), with cellulose insulation in walls and ceilings. Seal all plates and penetrations.

Good luck with your project!

This CMHC study showed that wall framing filled with damp sprayed cellulose dried after a year.

The fireproofing chemicals can be the problem in cellulose insulation. However, tests have shown that cellulosic material with borates are not corrosive. Cellulose with amonium sulfates is problematic though. See here And you can always use netted cellulose to avoid the initial moisture altogether.

FWIW, blown cellulose is the most common insulation in attics in our cold climate. It's all I've used since 1987 with no corrosion problems ever arising to my knowledge.