No disrespect to your advice S-F !
it has merit as well.

The original poster asked about the second floor. This likely only has a bathroom and some bed rooms. These probably need renovation anyway, mine sure did. When I did mine, I looked at it as a chance to do new electric, fix the heat, seal everything, etc... Sure all those things cost, but pay back in efficiency and peace-of-mind.

If the inside is nice and functional and you have sufficient roof overhang the outsulation may be the better option. if the inside needs renovation, a gut and fix job is better. Room by room as possible.

In the long run outsulating is almost always cheaper due to the previously mentioned reasons. The problem with it is that you're using a ton of foam, which I personally find distasteful. Basically a good DER using no exterior foam involves a complete gut renovation and usually also something on the outside to deal with all the thermal bridging.The Larsen truss is pretty interesting though. It's a TON of work but you can still go all cellulose/no thermal bridging.

This is exactly what I intend to do, although probably only 2x4 new wall instead of 2x6.

In regards to losing space, moving all kinds of plumbing, etc, none of that is a concern. Every wall I want to extend is a bedroom or a bathroom. I will not have any plumbing to move, or anything else major. The only thing I will have to move is electric. And since I'm taking off the old drywall, this will be quite easy. It also is nice because I would like to add some extra outlets. I had not wanted to do this before because I didn't want to disturb the current drywall. Now I have an excuse :-)

The R value of cellulose is said to be in the mid to high 3's. I believe fiberglass is in the mid to low 3's. When you factor in the fact that fiberglass is impossible to install perfectly, the cellulose seems the clear winner in by book. In addition, one of my main goals is to reduce outside noise. It seems that cellulose is much better than fiberglass at this.

I don't have that much extra overhang for soffit ventilation if I were to put 4 inches on the outside (at minimum what I would want to get the same effect as my inside plan). Plus, that foam probably wouldn't help too much with sound deadening that is at least half the reason for the project.

I am planning on one or two rooms at a time, so definitely a doable job.

Now I'm almost thinking of possibly JUST using cellulose and not putting the 2 inches of XPS. I originally wanted to do that because of the increased R value and air sealing properties. However, if I do 7 inches of dense pack cellulose, would that be pretty good at stopping any air movement? Or should I still stick with the XPS idea?

I feel , with the outside seal in place, stay away from the interior Xps.
From what I have picked up, it pretty much dictates to using the more the breathable choice/cellulose.

At least cellulose is people friendly /lung and skin as opposed to fiberglass.
I am unsure of Cellulose's lifespan with its rated R-value, I know The Expandable Foam they inject in refrigerators starts to lose its R-value in 10 years or so.
fiberglass all though nasty may hold out for the long run, a pure guess on my part.
Worth further investigating never the less..

Foam looses R Value because it outgasses. Cellulose doesn't rely on non air gasses for it's R Value so it doesn't ever loose it.

As long as it is dense packed. In a loose-fill attic floor application, the settling causes the R-value loss proportional to its thickness.

Yes this is true. But when cellulose in installed (at least around here) the settled density and R Value is what's calculated. So for 12" or R 38 (the code depth for attics) people usually blow to 13" - 14" in anticipation of the 1.5" settling.