Insulation Prevents Infiltration?

I am remodeling an upstairs bedroom of a 1940's 2-story. The outside walls of this room are sheathed with 3/4" Planks. There are large gaps in the sheathing where cold air penetrates the room. Fiberglass bats won't do the trick here since they only work on dead air space. On a windy day, I can really feel the drafts in this room. I contacted a local insulation contractor to see about spray-in foam insulation. They don't offer this service but suggested an alternative: Blown-In insulation mixed with water. He(insulation contractor) claims that he has seen cases where the need for housewrap is eliminated due to his technique. My Question: Is this an acceptable way to stop air infiltration from the outside walls, or should I start looking for an insulation contractor that offers spray-in Foam?

Thanks In Advance,
-12vman