Only use fake stone where stone would be if it were real stone. So in your case yes put stone on the foundation and that’s probably it unless there are things like column bases. No stone house transitions to wood at windowsill level.

Something strange in the pic - looks like the sill plate sticks beyond the wall sheathing and foundation. If your plan is to extend the stone to follow the slope of grade (since you need minimum 4" concrete exposure above grade), I would opine that would look silly. If you did extend down further, you would step the stone. And if you have a river (round) stone, you would need something like a lintel to get a straight edge at the bottom. However, because of that sill plate situation (if that's what I see) and the differential movements of wood vs concrete behind a surface-applied veneer, I would stick with only above the foundation.

I need to see the house from much further back but I think from what I see the stone veneer should only go above the concrete Foundation plantings can hide the concrete at least at the front . but I need to see the whole house..

Here’s what the old veneer looked like. I think they set the bottom flashing and had the veneer track the slope of the ground to give some clearance for concrete but the old veneer did cover up some of the concrete

So you'll keep the stone (round), stucco, then board&batten? Is there a stone water table on other elevations, and stucco too?

The stone veneer wraps around to the side of the house and extends for about 8 feet. Then it’s on the front of the garage - also in front of house. We were going to replace the river rock with a more of a rectangular rock that’s cleanly stacked. The cedar board and batten may get replaced eventually but right now it will be veneer, stucco, and board and batten

We had fieldstone (sandstone) on the lower portion of our house with wood above it. Rain would soak into the stone and wick into the wood above, rotting it. We had to flash the top of the stone, cap it, and replace the wood with cement board. Make sure your rocks or veneer is not water permeable.

I would skip the stone and the stucco and do it all in horizontal hardiplank, pocket the difference if there is any.

Any recommendations on material - sandstone v. Quartzite v. Granite? We live in environment with very snowy winters