Had some pretty good ice daming recently and the underside of the roof decking is still dry. So the dampness must have been from lack of ventilation?
Seeing the 2nd floor overall is inadequate by modern standards as far as head room, floor space, and structure, now thinking I may just tack 2x2's onto the exisiting 2x4 rafters, stuff baffles and R13 in there, drywall it and call it a day. It will still be a huge improvement over how this area was before.
A total overhaul is not possible at the moment and I'd hate to dump a bunch of money and time into the area I'm working on and then have to tear it all out again later if we rebuild the 2nd floor. This is how it's set up now: