There is a big difference between a plastic vapor barrier, and insulation. Read up on the two. If your shed it totally above ground, you should not need a vapor barrier. However, the outside structure plywood should have Tyvek or similar plastic water protection wrap on it, underneath the siding, which keeps water droplets from coming into the walls, but allows moisture to wick out of the walls.
Insulation is always nice to have. It makes the room more comfortable inside whether it is summer or winter. It also helps to keep the hollow spaces between the studs from becoming wasp hives and spider nests.
Whether you decide to insulate or not, you can't totally seal the room up like it is a plastic bag. Big damage will occur. So, no matter what, you should have a small vent near the floor on one side, and a small vent near the ceiling, on the other wall.
Dehumidifiers work extremely well and can totally eliminate all of your worries about excess moisture, mold, rust and rot. The cheaper the unit you buy, the quicker it will burn out. Buy one in the $500 range, set it to 50%, and forget about it. Be sure to have a drain line running out the back and into the yard, flowing away from the foundation. I
I've had my layout set up in the basement for almost two years. I live in an extremely humid area. I keep my dehumidifier set on 50%, and I have absolutely zero rust on any of my track, rolling stock, or soldering spots.
Mannyrock