[HayZee518]

From the looks of things, your slab was poured, then a bedding layer of mortar mix was put down and two courses of concrete block was put down. I can't see inside the block's cells so I can only assume the bottom plate was just laid on top of the blocks. there's nothing but the sheer weight of the house holding everything down. normally the cells are filled with concrete and a sill anchor is put in. a hole is drilled in the plate and bolted to the sill hook then your regular construction is started and the house goes up plate, floor joists and fascia, floor sheathing, floor plate, studs, top plate, ceiling joists, rafters and ridge pole, roof sheathing and roof. the joists may be nailed into the fascia or may be notched to fit over the bottom plate. that bottom plate is rotting so everything else is gonna go downhill as far as wall integrity is gonna be. for your answer about water, the concrete is angled to run water off the block but there is no bond between the concrete and the plate so by cappillary action water goes between the concrete and wood and settles into the wood and starts to rot it. a sheet metal block cap and flashing eliminates this weeping of the water and wood.