sealing external stucco--is that bad?

There should be no openings for venting or anything else at that level of siding. If there is another layer of siding under the stucco, it should be flashed properly, then the stucco would need to counter flash this. If that is your only layer of siding, masking tape and a thicker grade of asphalt would dress it up a bit. Cover that entire area all the way around the house. Bury it after, if you have the room. Vent stucco siding at the top of the wall. It will intake from inside the house.

I am not sure your answer is correct. What about weep screed?

First, let me explain stucco veneer system.
In applying the stucco system to a wood frame, you would wrap the area with a house wrap or felt. This helps keep water from enter the structure. Then apply the metal lathe and then the scratch coat (cement mix) and then the final finish coat.
Conventional stucco which I believe you have is similar to a stone veneer in that it absorbs water from the outside (i.e. rain). The stone has weep holes drilled into the bottom of the stone wall to allow water to escape from the back side of the stone. The front side, of course does not need weep holes because it drains down to the ground. Conventional stucco is similar to this method. The weep screed at the bottom is the exit port for the water from behind the stucco cement to drain. If you put the tar at these weep screeds, then you just plugged the water from draining and now you will have further problems down the road.

To get to the reason that you have gotten water into your house is possibly two reasons. (maybe more)

1. The initial installation of the stucco system was done incorrectly or it has failed for some reason down the road.
Most common problems occur because of improper flashing of
windows or pipes extruding from the wall above the leak.
2. The other reasons is the one you touch on in your post.
Drainage water from your yard is getting pushed up the slab into the bottom of the weep screed and getting into your house.
I would as you suggested; redirect the water away from your house. You should have at least 6" of slab exposure. As far as your pest problem, ant poison is the way to go. Plugging up the weep screed holes is not.

Hope this helps,

Pat

Pat,

what if the weep screed is rusted and water is getting in between the slab and the exterior wall? How do you fix it to keep the water out of the house? The area is question is about 5-8 ft long. The house is about 19 years old and the exterior is all stucco.

Thank You,
JSR

The weep screed being rusted shouldn't make a difference. You should have not plugged the holes as now water can not escape from the stucco as easily. It sounds to me like you have more of a landscaping drainage issue. You need to direct water away from the house so that he water doesn't come up above the foundation level

how do we seal the stucco and repair leaks around windows

Should there be a 1" or larger gap between the weep screed and foundation? If not, how can this gap be filled preventing rodents and insects from getting inside the walls?