Oil finish on Cedar Cladding

I am just about to reclad an area of external wall with sawn cedar bevel siding. A previous owner chose to paint the cladding with blue acrylic paint that is just too hard to remove.
I want the cladding to be oiled to bring out the colour and grain in the cedar. What should I use? I have heard about Tung Oil and I have used Aussieclear to good effect on outdoor furniture. Has anyone got some good advice?
Further, I plan to pre-drill to prevent splitting and use galv' nails. I dont want to see the silvery nail heads and had planned to putty. Will an oil also stain linssed oil putty or should I buy a putty (or woodfiller) that is already tinted?
Thanx for your advice. Niven.

DO NOT use galanized nails with cedar cladding, if nail heads visible it will stain cedar, black streks will appear. Use stainless nails if possible.