Fixing Cedar Siding Boards

I have been in the process of removing old caulking and putting in new caulking at the ends of my cedar siding boards as well as in some slight splits that have formed around nails in some of the boards. Unfortunately, some of the boards have started to rot a bit due to water. I would like to replace these next summer before I put a fresh coat of paint on the house. However, I am wondering how difficult it is to replace these boards.
I know I can purchase cedar boards from Lowe's, however, I am concerned with how difficult it may be to remove the boards from their positions and in turn how to put the new board in.
Is it as simple as removing the nails, sliding the board out, and sliding the new board in.
Also, if/when I replace, I would like to use screws instead of nails. Is there a specific type of screw I should use for this application of cedar boards.

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