Plaster is hard pressed to support mold itself (too alkaline mostly). Sheetrock, OTOH is mold's idea of seventh heaven if it gets wet.

Still, I wouldn't let your contractor hang cabs to simply hide holes in the wall without sealing them up if only because mice and drafts will enter your room. It's not a big deal to make patches with sheetrock, just a bit time consuming. Stop him now and make him patch those holes before he goes further. He knows better and he's just taking an unnecessary shortcut.

(You can make patches yourself, over the weekend, if necessary. Good chance to play around with patches, tape and joint compound in areas where pretty doesn't count.)

HTH,
L.

Thanks so much! And great to know about plaster and mold! So one thing I didn't make clear is the area in question doesn't have holes; it's actually missing the outer layer of the wall covering the area of the cabinetry. Our previous cabinets were attached right to it.

The circles in the lath also look a bit like cement, though we assumed they were plaster. It does not look like the other plaster in the house so I guess it was added later. Anyway, the contractor doesn't want to drywall that because it will make the walls not flush.
Any other thoughts? Thanks again!

"The circles in the lath also look a bit like cement, though we assumed they were plaster. It does not look like the other plaster in the house"

It could be the base coat with no finish layer added.

Allying the base coat around edges and other items that are through the wall was how a wall was finished.

These areas set the face of the coat and served as reference points in the layer.
The same method was used for finish coats, and large areas might even have spots added to the base coat to provide a reference for the finish coat surface.

The tool used to uniform large areas is called a Darby, and they are normally only about 4 feet long.
The round handle on one end is used to hold that end in position, while the long handle about 2/3 of the length away is used to swing the Darby over the surface.
It allows for fast leveling of a large area.

Trowels are ten used for the final smoothing especially on a finish layer).
Trowels are much faster for large area coverage than drywall type knives.

Thanks. Now my husband thinks it is the base coat and that there was wainscoting or something over it. So is finishing it off a potential DIY project?

"So is finishing it off a potential DIY project?"

If you have acces to the materials ad are wiling to learn.

"Plastering Skills' may still be out of print, but it has good directions and you can usually find used copies.

It is a pretty hard job without a mortar mixer for the plaster.

You need lime putty for the finish coat (though Easysand works well and is at the local big box store.

Sounds like we need to call in the pros! Thanks!!

"Sounds like we need to call in the pros!"

Depending on your location you may not even be able to find anyone that does more than drywall.