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Siding wood rot?

10 years ago
I have a 40-year old house with painted cedar siding and today discovered some soft spots at the bottom of a few boards very close to the ground that are crumbling=rotting. The house is on a slope, and one corner has siding that nearly touches the ground.

Last fall we had a leak around the chimney that led to an exterior board with rot ring replaced, as well as some framing members and drywall and fireplace surround. It was a sad revelation that the house was not as well cared for as it had seemed when it was inspected. The good side is that I got to see behind this wall where some of today's affected boards are and there was no visible discoloration or softness on any of the studs.

How urgent is it to replace these boards when I see rot at the bottom? I don't want to risk structural damage, but I also don't want to rush to fix a cosmetic problem so soon after the last big house expense. Can I clean and paint the wood and wait til next year, or do I need to immediately replace any wood that has signs of damage?

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