The purpose of the outer layer of black paper (or perhaps the other product suggested above) would be to keep the water from reaching the Horizontal nailers. Even if water reaches this area, it would vent into the airspace and be gone soon enough.

You state "The siding is not at all waterproof, what with knot holes, cracks, and gaps between boards.". I would assume then, that these defects, knotholes, etc would allow enough air circulation and/or air access to dry the backside of the siding.

The outer layer of black paper would also hide the sips or nailers from view.