For the record, salt (sea) water will (help) preserve wood, not rot it in many cases. When wooden boats were popular you always wanted salt water in the bilges and not fresh water for that reason: fresh water promoted quick rotting, while salt water tended to retard rot.
Of course if you have steel studs, salt water would be a really bad thing!
I should have clarified I was thinking about the steel studs. Wood holds up much better. The galvanized studs would be OK - until you made screw holes in them, then the rot can start there.
Plywood will peel apart and be a huge mess, hence the suggestions on just sticking with drywall. I'd use stainless screws because the drywall will just fall apart in a mess that's not so bad to clean up and you could re-use the screws. More $, but regular drywall screws might be trash by the time you get to removing them. And if the damage is low, you can just cut the bottom half off and re-rock. We were just at a wedding in the spring down at Surfside. The house they rented was right on the intercostal. It's construction had everything on floor 2 and 3 with only stairs and storage on 1. The garage/parking was open studs and the siding on the house was HardiPlank.
What you get from a storm can be many things. The surge is pushed in front of the storm and how much you get depends on the size and strength. It's not rain water - it's a mass of sea water pushed inland by the storm, driven by wind and raised by the low pressure. Could be 2' or 20'. Also depends on your height, location in relation to a sea wall, etc, etc, etc. If the storm passes to the east of you, you might get a little and if it passes to the west you could get creamed. We lived in Houston when Andrew came across Florida. When it hit Cat4, we started making plans - and we were 90 miles from the coast. It was pointed dead at Houston/Galveston and turned back NE at the last minute. Storm surge for Florida was said to be in the 7-10' range. When that kind of storm comes, you board the windows with OSB, take what you really, really like and leave for DFW or Austin. You just don't know what you're going to come back to.
Flooding of any kind is very destructive and the muck it leaves behind is not easily removed. We helped a friend that was in a flood in Kingwood in 93 or 94 - his stuff was underwater less than a day. That crud left behind on stuff isn't regular mud won't come off with a fire hose. Everything is junk.