Okay, so it's a done deal at this point. I ended up doing the exact opposite of what I said I was going to do and bought the stiff plastic fencing and threw it in there every 2 feet. It is just laid there, hopefully it will offer *some* extra support over just straight dirt.
I didn't put any layer of impermeable plastic under the surface to keep water from filtering in. We had it there ready to install and then decided not to, because it would keep the vetiver grass and the other erosion control plantings from putting down deep roots. I dunno but the hippy dippy farmer in me keeps thinking roots are always important.
Came back today after having put in almost all the dirt and there were stains below all the weep holes indicating that water had been flowing through during the previous nights rain. We're in rainy season now.
There's concrete stucco on the front of the wall so I'll be able to easily see if things are cracking up any time soon. But I hope that following several of the local old school mason's advice won't come back to kick me in the butt.
Thanks everyone for all the input!