Insulation, Radiant and Vapor Barriers - How would i seal the hole at the bottom of this wall?

This is a second floor exterior wall facing my backyard. On the first floor beyond this wall is our kitchen, which was an extension.

The top of the roof of the kitchen hits the wall about 2 feet up and the attic area above the kitchen can be seen in this room. Hot air is pouring from the kitchen attic into that room from that hole. What can i do to seal the bottom hole left from the original 100 year old subfloor not meeting the bowed out balloon framed walls. Is there some sort of soft foam type insulation i can stuff down there that will prevent air movement? The gap is too large to use canned foam, about 5 inches separates the wall from the sub floor. I am furring out the wall so it is straight and level but the bottom of the drywall will still let air pass from the kitch attic into the room.

what i want to do is seall off the attic from this room without letting attic air behind the wallboard i will be putting up. There is no access hatch to the attic space because of space limitations so i cant reach the area from the other side, and framing from the rooms side prevents me from adding anymore foam board.

http://pic100.picturetrail.com/VOL717/2738843/20367683/368026417.jpg

Why can't you cut strips 5 inch wide of the same blue foam you have now and stuff the holes with it then spray foam the strips edges to seal it in place? Cut them a little larger than the opening and they will wedge into place pretty well. Then the spray foam will glue them in place as well as seal any small gaps.
I am hoping there is room behind the foam I see now for the attic space to be able to vent.

If I can picture what your photo shows correctly...

Assuming that there are floor joists running parallel to your orange yard stick, balloon framed, like you mentioned, onto the sides of those joists, why couldn't you cut the old floor a little bit so that it's straight with that new wall, then cut some new subfloor to that width and nail it to the top of the joists?

Or are the joists perpendicular to the yard stick, leaving you nothing to nail to? If so, then you'd need to cut the floor back to the center of one of those last joists, remove the old floor next to the wall, attach another joist to the wall, (like a ledger) and then you'd have something decent to nail some more subfloor to, which would eliminate your gap.

Yeah, the joists are perpendicular to the level.

Thanks for the suggestions!