The XPS should be as tight as possible to the foundation wall; attach with concrete screws and fender or cup washers.

Without knowing your climate zone, its impossible to say what is Code. But unless you're in the southern US, a minimum of R10-R15 would mean 2" or more of XPS.

Yes you can fill the area between the XPS and the drywall with fibrous insulation. Rockwool would be the best choice as water will not affect it.

To prevent mould and rot, the baseplate of the wall should have been set on 6mil poly; or at least pressure-treated lumber. At best, it should be on 1" thick strips of XPS.

Thank you. We live in Connecticut and unfortunately our guy used 2x4 for the entire project. No pressure treated wood. Not even on the bottom Against the concrete. Our basement is a walk out and never gets any moisture. The XPS is against the concrete and then 6” of dead space. Do I HAVE to fill the space? We are icing in a year and I don’t want to do any extra work.

Thanks