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Detached Garage with Clapboard (Insulating from inside)

Hello, this is my first post. I have a two car detached garage that has clapboard on the exterior.  the inside of the garage has exposed studs (it's an old house so true 2x4 studs).  I'd like to start insulating it so we can use the space year-round.  I got to Home depot and there are multiple products on the market.  I was worried though about sealing up the walls following the insulation. Basically, What do I do?  what insulation will allow the garage to breath (I heard that clapboard homes need to breathe).  so do I buy a mold resistant insulation and then cover the studs inside with plywood or drywall? do I need a vapor barrier? is it any different installing insulation from the inside?  What should I be concerned with when looking to insulate?

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