Basement Remodeling: Waterproof or Not?

We have a 50 year old brick house with a half-finished basement that has never been remodeled. In the 15 years we have owned the house, we have only had one serious flood in our basement. One winter where there had been a lot of snow and ice, and in a fluke the temperature rose overnight to something like 60 degrees and a foot of water rose and destroyed our tile floor and the carpet remnant we had. It happened to hundreds of houses in the area according to the news. The only other water we have had is in the unfinished side in the laundry room where if the gutters are neglected and we get a wicked rainstorm we can get some puddles from the window well. Sometimes if there is enough water it will spread over to the finished side.
Well now we are considering getting the basement remodeled, getting rid of the 1950s paneling,tile ceiling and tile floor and replacing it with drywall, drop ceiling and either wall to wall or remnant carpeting.
My questions are:
1) Should we take the extra step and cost of getting the basement waterproofed?
2) Would any kind of waterproofing have prevented the flood we got from that fluke speedy warming like that February night several years ago?
3) If drywall gets wet, does it get ruined and need to be replaced?
4) If you recommend waterproofing, which kind sounds most appropriate for our situation?
Thanks in advance!
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