Well, the reason for the balsa is to keep the two layers of skin apart. As in a I-beam, vertical loading puts the flanges in bending, with the web in compression. So, when you soak the balsa (the web), it loses the capability to resist compression, the two skins move together and the hull loses its ability to withstand loads.
As to the allusion to "getting it right", I can only speak to the 2005 C-Dory 25. We had several issues where the boat wasn't caulked correctly and the factory fixed it. Those issues were primarily in the anchor locker and the sump drain where the plug goes in. I also believe that Bob was referring to the practice of putting screws in the interior hull without sealing them, either by sealant or epoxy. This includes the bilge pump as well as the interior cabinetry. Until they went to a one piece interior cabinetry, which is tabbed in, the dry screws were common in all C-Dorys.
That said, we've owned Journey On for 12 years, which is a testament to the soundness of C-Dory construction. They're a very dependable boat. Sealing the screws is up to you. Testament to that is that this is Bob's second 25, for the same reason we have: simplicity, dependability, room and of course, the head.
Boris