What else is under the siding?

Siding is not waterproof by itself, but there should be another layer of something (possibly even tar paper) that is the actual drainage plane behind the siding.

If you seal the bottom of the siding any water that penetrates will not be able to drain.
This can result in damage to the siding itself (if it is wood) or the structure (if the water gets past the drainage plane and into the framing).

Houses don't need to 'breathe', most are not tight
enough. Very few achieve a level of tightness that
is problematic for the homeowner. When a house does
achieve this low air change exchange rate, fresh air
can be added as long as it is filtered and dehumidified
before entering the house.

In our location (hot humid climate) houses dry to
the interior, foam behind siding is actually a good
thing as it will stop air flow (if installed properly)
and provide a thermal break at the studs.

But foam next to the ground is a termite interstate.
(got that from Joe @ building science.)

best of luck.