I'm trying to prove the following statement:
Theorem A Let $X$ be a non-singular variety over a field $k$ and let $Y \subset X$ be a smooth subvariety. Consider the blow-up $f : \widetilde X = Bl_Y(X) \to X$. Then for $i > 0$: $$R^i f_* \mathcal O_{\widetilde X} = 0.$$
This is mentioned for example in Hironaka, Resolution of Singularities of an Algebraic Variety Over a Field of Characteristic Zero I, p. 153 without a reference or a proof. My attempt (following the proof of Proposition V.3.4 in Hartshorne's Algebraic Geometry):
let $\mathcal F^i := R^i f_* \mathcal O_{\widetilde X}$ and let $y$ be the generic point of $Y$. Then the support of $\mathcal F^i$ is contained in $Y$ and using the Formal Functions Theorem, we get:
$$ \mathcal F^i_y = \lim_{\leftarrow} H^i(E_n, \mathcal O_{E_n}),$$
where $E_1 = E = f^{-1}(Y)$ and $E_n$ is given by the ideal sheaf $\mathcal J^n$ (where $\mathcal J$ is the ideal sheaf of $E$ in $\widetilde X$). Thus the above statement should be equivalent to:
$$ H^i(E_n, \mathcal O_{E_n}) = 0 \qquad \text{for all } i, n \ge 1.$$
Also, we have an exact sequence:
$$ 0 \to \mathcal J^n/\mathcal J^{n + 1} = \mathcal O_E(n) \to \mathcal O_{E_{n+1}} \to \mathcal O_{E_{n}} \to 0 \qquad (*)$$
Thus, it seems to me that the Theorem A is equivalent to the statement that $$H^i(E, \mathcal O_{E}(n)) = 0 \qquad \text{for all } i, n > 0. $$
On the other hand, $E = \mathbb P(\mathcal I/\mathcal I^2)$ is a projective bundle over $Y$ (where $\mathcal I$ is the ideal sheaf of $Y$ in $X$). Thus $$ R^i g_* \mathcal O_E (d) = 0 $$ for $i, d > 0$ (where $g = f|_E : E \to Y$) - see e.g. Stacks. Therefore by Leray spectral sequence we obtain: $$ H^i(E, \mathcal O_{E}(n)) = H^i(Y, g_* \mathcal O_{E}(n)) = H^i(Y, S^n(\mathcal I/\mathcal I^2)). $$ The right hand side seems to be non-zero in general.
Question: where's the mistake? How to fix it? Alternatively, what is a reference for the proof of Theorem A?