Best way I know how to do that is to prime first with 2-coats of oil based primer, like Kilz...caulk after you prime.....it takes two coats to seal the cedar and prevent tannins in the wood from bleeding through...especially on any knots. Then 2-coats of a good interior latex and you'll be good to go!
Behr Kilz has a new one called Kilz Complete that works great. Should be able to get by with one solid coat. I agree after you prime, caulk, you will be able to see the holes better. They will stand out like a sore thumb. If you have some really rough spots you may want to lightly sand to get more of a smoother surface. Good luck, let us know how it goes.
Cedar is tough....not sure about the Kilz Complete...haven't used it. Doing it my way has never caused me a callback. Try it and let us know how complete works!
Cedar, especially the older and more red, has as much resin or tanins as any wood. Because of this, I have had bleed through problems using regular oil-base Kilz. This is especially noticeable using a lighter color finish coat. Because of that, we use two coats of alcohol based BIN, the original white shellac, on cedar, redwood and knotholes. This is available at The Depot and paint stores. You will need to use a respirator.
I'm so glad you are painting them instead of replacing.
Interesting Charles...I haven't tried BIN but never had a bleed through with 2-coats oil. Will have to give BIN a try next time it comes up!
Kilz works fine for most cedar today because it is young, new growth cedar, mostly lighter color with not alot of resin. Since this is from 1978, it's probably from when there were some good older trees still around. BIN is the ultimate sap sealer, it works on knotholes where kilz won't.
Good tip Peace...have to try that out!