Your chisels, gouges, and sweeps have to be razor sharp and you have to be cognizant of the grain direction while carving. Western Red Cedar lasts a LONG time. I guess that's why the West Coast Natives used it to carve totem poles.
Avoid any boards with a face grain or you're going to get "cupping". Edge grain boards only for laminating in to larger panels and you'll have a panel that's good for both carving and sandblasting. No problem running laminated panels through a CNC router either.
Best practice for carving signs is to coat out your panel right down to the final finish, cut your paintmask letter pattern, line it up and stick it down, then use that as your carving guide. Lay in your gold size, let it tack up and then lay in your leaf. When you remove the paintmask the gold leaf will have a nice crisp edge and nothing more is required.
Avoid doing it the other way around. That is carving first and painting after. Way too time consuming and less accurate than doing it the right way the first time.
If you're going to do the carving on a CNC router just cover your coated out sign panel with paintmask and router your letters/design right through the paintmask. If you're just doing a contrasting colour for the carved part of the sign you can do it in a hurry as your paintmask will do what it's supposed to do and keep the paint where it's supposed to be. I usually use a little of the background colour to seal the edge between the paintmask and the sign panel but it's not entirely necessary.
Western Red Cedar is the right product for a number of reasons.
It lasts a long time.
It's easy to work with.
It looks nice if you clear coat it.
It has a beautiful patina if you just leave it to age naturally. (At least I think it does.)
It holds OneShot very well if your intent is to cover up the wood.
It's considerably lighter than Medex or Extira.
Carved lots of Mahogany when I lived in Belize and find it's more difficult to work with than Western Red Cedar. Of course they never called it Honduran Mahogany but it's the same thing.
If you want to carve wood that the Maya used for their carved lintels then get a hold of some chicozapote. That stuff will last 500 years or more without any special treatment. Carved some of zapote when I lived in Belize but it's not the easiest stuff to work with.