Wood Siding on an outside storage building

Need advice from the more learned! We are building an outside storage shed, 12 x 24. Exterior is wood siding (HandiPanel). My cohort thinks the bottom of the siding should extend about 1 inch below the treated floor joists. I say NO! Have the bottom of the paneling about midway on the outside of the joists. The building is built on 6x6 treated runners and 2x4s treated on 16 inch centers for the joists. That is on concrete blocks so it is off the ground a little.
What is right?

Also, we are putting on a shingle roof over OSB. Is it necessary to put felt paper under the shingles? We were told the only reason builders do this is so it's easier to remove old shingles when time to replace the roof, not that it is any help as a vapor barrier, because the shingles have a tar strip on the back that heats up and seals in the sun.

This is our first really big project. We are both stubborn in our opinions! lol

Any help would be appreciated!
Thanks!
Yvonne