After 20 years or so this is what happens when siding contractors allow the open end of the wood siding to touch the roofing. For 20 years every rain storm and snow storm has been sucked up the open unpainted edge of the siding off the roofing. Water damage like this can make its way through the walls and into the basement. Sometimes sheathing and roof rafter damages exist depending on how bad the leakage is and for how long it occurred.
Have the siding removed and proper metal step flashing installed during the next removal and replacement of the roof covering. in order to avoid further damages and problems.
Due to the extent of the existing cosmetic damages one must anticipate additional latent problems, hazard or damages.
Several times a week I tell clients siding roofing contact is not allowed and why. Just about never does any home owner do about anything. In this one case it is easy to see what happens when the home inspector is right about the potential for the problem.