I really don't understand wood window frames. I've worked on them in some very expensive homes, and when I start looking for issues with them, I always find them. I personally prefer metal/aluminum frame windows. They open and close better then vinyl, and they look a lot nicer then vinyl. I admit that some wood window frames are very nice looking, but in my opinion, not worth the effort it takes to keep them from rotting of time.
In your case, I believe that the better you can seal those windows, the longer they will last. I don't think primer will keep out moisture, but it's a good fist step before painting. I like Zinsser 123 the best.
For damaged wood that will be painted, I like to use automotive Bondo. There is house Bondo too, but I don't like it as much. The automotive Bondo comes with the red colored stuff that you mix with the Bondo to make it harden. The house Bondo stuff is white. The red mixes better, lasts longer while spreading it, and sands better when it's hard. I usually start shaping it with a chisel before it gets really hard, then I use a palm sander if there is enough room for one. If not, a block and sandpaper work too. 80 grit gives a nice finish and removes material quickly.
I use Bondo a lot on older homes with fancy molding on the outside that has started to rot away. I remove the rotten wood, vacuum out everything that's loose, the screw in as many screws into the open areas that I can so the Bondo has something additional to hold onto. Then I build up the Bondo, chisel it into the shape I need, and sand it until it's perfect.
Another good place for Bondo is at the bottom of garage door frames. Most of them are rotten out where they touch the concrete.
