BiggerPockets

The governing building department is always the best source for questions like this. Different localities use different codes and have different local conventions of what's OK and what's not. Just call and ask to speak with an inspector.

According to the 2006 IRC (Interantional Residential Code), wood is allowed for foundations. It must be treated and dried in accordance with AWPA U1, commodity Specification A, Use Category 4B and section 5.2. Any cut edges or surfaces must be treated with 2% copper naphthenate until the wood won't absorb any more. Stainless fasteners must be used below grade. Above grade, stainless fasteners, silicon bronze fasteners, copper fasteners, hot dipped galvanized nails or hot tumbled galvanized nails can be used above grade. Electroplated nails cannot be used nor can galvanized staples.

No idea, though, what local variations apply, or whether these rules apply on not, since this is not truly a "foundation".

Call and discuss what you want to do with an inspector. I've never been forced to give my name or the property address for a discussion like this. I've also worked with licensed contractors that also called and had discussions like this.

The only problem I have with the parging over plywood is unless you are building a frame behind the plywood it will be way too flexible and cause the parging to crack. If you want the look of a parged foundation wall, I'd just go the masonry route.

Another option, albeit a totally different look, is PVC lattice. You can get it in a really tight weave and it would be much less expensive than masonry. Then just put some shrubs around the foundation and be done with it. I have done this on several pier/beam additions I've done and it always looks nice.