I'd run a bellcast bead (or a stop bead with a drip) along the top line of the stone, so the render finishes on the bead and rainwater is thrown clear of the cladding instead of running behind it. Leave a small gap between the bead and the top of the stone and seal it with a flexible exterior...
Cut the existing coving back neatly where the new wall meets it with a fine-tooth saw, then fit new lengths with an internal mitre into that corner. A coving mitre box makes the 45° cuts much easier. Stick it up with coving adhesive, wipe off the squeeze-out with a damp brush, then fill the...