Not a pro, but I have a 1990s house, New England, wood siding, even the same color as yours. My knowledgeable friend determined mine to be solid stained because it was wearing but not chipping (and I suspect it had not been restained since the original time 20 years earlier). Got it re-stained in solid stain and has looked great since (7 years). Yours sounds like stain. I’d never paint it - too chippy and no going back. Oh, and instead of a power wash, I had one of those green roof cleaning companies “soft wash” the siding while they did the roof. Got rid of the green slime on the north side and great prep for the stain.

Stain it. Paint IMO shouldn't even be an option.

Semi-Transparent Stain if you can use it will keep the grain better than a Solid Stain

Thanks. Will it be a problem to stain over whatever is on there? Even if there are some parts that are paint?

Any thoughts about using a paint on the facia and waterboard (which I think were more likely to have been painted before and are not cedar.)?

I used paint in the same color for my window trim, which I wanted to be easily wipe-able. And I can re-do the windows easily myself when necessary. Looks good.

Its ok, to paint the window trim and the facia. I would prefer oil based semi transparent stain on the house, because, it will keep the graining of your beautiful cedar.

IMO that cedar has already had some finish on it so staing it now would not be effective. It needs cleaning before anything is applied and there are tones of really good acrylic exterior paints avaiable It would be nice to see your whole house to help with a color so post those pics here in a comments do not start another post

Talk to your painter. If he doesn't sound knowledgeable, get a better one.

The siding looks like stain to me, almost no paint film buildup. As you say it is common to use solid color stain on the siding and paint on the trim. Woodscapes is a great product..