Damp but developable sub basement!

Here's the story: Relative is considering purchase of a 3 bed main floor house; with a 2 bed apartment that occupies about 65% of the lower floor/basement. The apartment has standard wooden joist floors above a 'crawl space'. The 17 year old house is well constructed (engineering survey done) and on a lot that slopes considerably away from the street. We've reviewed slopes and drainage etc. and have no concern that there is or will be a problem. Existing municipal water and sewer go out the front and are at suitable depth for no problems to be foreseen or previously encountered. We have 'discovered' that the crawl space is another basement area underneath the apartment; which due to the slope has about 3 feet head clearance at the front (underneath the 'owners' part of the lower floor) and some nine plus feet at the rear. The only access at the moment is a floor hatch in the owners area and two very small windows (Which you might get a youngster to scramble through!) in either end of the 'extra' basement. The area of this sub-basement is the full width of the house, some 30 to 35 feet and at the moment without further digging out at least 10-12 feet in width. This whole sub- basement has a dirt floor. It's like finding, except for difficult access down the slope, a bonus workshop area! Which could be accessed from outside instead of that hatch into the crawl space! The area has insulation in between the floor joists of the apartment above. Over that, on the 'cool' (sub-basement) side someone has applied plastic which is now hanging down in places and is damp. Some of the insulation is most likely damp but not 'soggy'; no rot or mould is evident. The area is not properly or most likely not ventilated at all. Looks like previous owner did not understand vapour barriers and/ or moisture barrier on the soil and/or ventilation? Fortunately the structure has not, according to the engineering survey, been compromised. There are some 'carpenter beetles' (wood louse) enjoying the dampness! First job of course will be to properly dry out the whole thing and look closely at what is there. We may also provide a proper walk-in access door by cutting through the concrete rear wall, so we can get in there and work. Also extra windows, facing to the rear which will add daylight and ventilation capability. Questions.

1) Thinking we will pull down all the ceiling insulation (which is the floor insulation of the apartment) and use sprayed in foam to provide a vapour barrier and insulation of the whole ceiling? 2) However, would an alternative be to shortly finish this extra sub- basement with wall insulation and proper damp proofed and cement slab floor and without heating it to a full say 70 degrees F provided minimal heat and proper ventilation? We are going to modify and upgrade the existing main floor only air exchanger which is some 17 years old and is not a heat recovery type; so this area could be added. If it WAS desired, later, to add say a workshop toilet and/or washbasin in this additional space it would have to be of the 'pump- up' type (about five feet) probably via a small sump. The house incidentally has an excellent forward facing attached garage 18 by 20 at street level and is very accessible from the house and outside. So it is possible to understand there was no requirement, except it was needed to build the house into the hillside, to develop that extra sub-basement area. The amount of concrete in this house must have been considerable! There is not a lot of land to the rear of the house which then some 20 feet away then slopes down to at the moment undeveloped land with small trees and bushes. Probably this time of the year, come to think of it 'blueberries' (which were not, this year, very large or plentiful! Due probably to the coldish wet summer). But have already picked our couple of gallons and have some frozen and some ready to make jam. Any comments most welcome.