We are are planing to replace our 3rd floor porch and I have a question about the orientation of the boards. What is the purpose of the board that is parallel to the siding and perpendicular to all the other boards (marked in yellow on the picture). Is to ensure a proper seal to the siding? Is it required? I am mainly asking because it complicates construction.
That's a "breadboard end", and it's simply a design element.
There is no requirement for it that I'm aware of. If you do an internet search for deck images, you'll see a wide variety of decks with and without this type of breadboard edging, and the ones with it will have it in varying widths. It's purely aesthetic.
The most important thing is to have metal flashing that runs up under the last piece of siding above the deck and across the top of that tripled ledger board. The metal will help shunt water off the top of the ledger instead of letting it sit there and rot it out.