Owen,

Cedar might be slightly toxic to the bees, but would keep out wax moths -
assuming you meant easter red cedar (we use it to line closets). western
cedar is different, but either are expensive.

water exchange is ok, you want interior to absorb excess moisture and
have that leave the wood. This is generally a slight amount of moisture,
and some is needed to prevent the wood from excess drying, which would
lead to splitting,  while its evaporation helps prevent mold and fungi.
The exterior paint is to prevent large amounts of water from penetrating
during rain, sleet, snow, etc.... In the winter here, it can rain for days
on end, with dips into the upper 20's at night. If too much water gets
into the exterior, the freezing can cause significant damage (easily seen
on an abandonded hive I am rehabilitating - it was unpainted).  In other
areas, and here in the summer, the main enemy is the sun - any paint helps
to protect against that.

Personally, I use high quality latex that the store wants to get rid of.
There is  always a good selection of $20-$30 paint marked down to less
than $4 here (let's here it for high school workers!).  I don't mix the
colors, so different hives are different mixes of colors (most of which
are in the range that bees can see), assisting bees with orientation.
Not to mention making the landscape a little more interesting.

Note: The hives are not visible from other property, must trespass to
get to our field and see them. The are against a wood row for wind
protection and summer pm shade, to to "blend in", they would have to
be very dark brown or green.  White is the most visible choice I could
make. Not that I worry, we are zoned agricultural and the bees are on
the land use application.