I want to add about 4" of wood chips for about 5-6' around most of the perimeter of my back yard.

The yard slopes down towards the back of it like in the attached picture. Then there's the gutter, the fence, and to the left of the fence is a 6' block wall that goes down to a sidewalk on the other side.

5-7' in from the edge and/or back gutter, I want to put a border and then a smaller section of grass within the middle, possibly with the Rainbird XFS underground irrigation.

What's the best way to add in the wood chips?

Should I...

dig down to the right of the gutter 4", and then level it off with wood chips to bring it up to the gutter level?

dig down 2" and use 4" edging of some time and add wood chips to level it off 2" higher than the gutter where the edging tops out?

rather than put a paving border in about 5-7' from the perimeter, is that where it could make sense to add a swale - dig down a bit and fill with rocks for about a foot wide?

I plan to put some fruit trees, berry bushes, and probably some veggies around the perimeter (already have some, just not in the picture.)

My worry if I dig down too far next to the gutter, and fill in with 4" of wood chips, then the water won't flow into the gutter at overflow times.

So I want to keep the wood chips out of the gutter, but want to let the water flow into the gutter if it needs to.

Best way to go about that?

Greg