Great Questions!

For smaller spaces I'd suggest keeping your design moves simple and few - otherwise the space will feel cluttered or crowded. You can certainly install wainscoting over the entire space, but maybe look into making the color contrast between the wainscoting and upper wall less than you would in a larger space. I'd also keep the panelling the same in the open spaces -- if you want the bedrooms to have different treatment I don't think it would be a "stylistic" mistake, but my preference would be to keep it the same. Also, if you need a bit of variation from room to room try adjusting the height of the wainscot -- higher usually works well in dining rooms and you can drop the top by a foot or more in the other spaces...just make your transitions look purposeful and you'll be in great shape.
I hope this helps, good luck with your project!
-Kevin