What's behind there? Wood or concrete? Usually the drywall is left a little high off the floor in case water gets in the garage. Mine is similar and my concern is if it is sealed enough to not let exhaust gases get into the house. I'm planning on using a little expanding foam along the edge to seal it and then use some baseboard that can get wet, maybe pvc to cover everything.
Depends on how your house is built. My basement floor is about 8 inches higher than the garage floor so mine is concrete. If yours is all one level than they would have framed that wall right on the garage floor and it would be wood. Obviously it's better to have your garage as a pit surrounded by concrete, but not all houses are like that.
Drywall is supposed to not touch the Floor, since most people will wash them out.
Personally I would go get some 1x6 PVC or Trex boards and trim it out as a bumper. They would holdup a lot better in the long run.
When you install them, make sure you have that area well cleaned. Place a bead of clear Silicone at where the board will meet floor. At the top, run a bead along the top where board meets wall to help seal.
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