Hmm. From the photos, I kind of like the pecky paneling. And the brick. I'd rather see you update the ceiling and vertical blinds. And I suppose if they don't look well in person, maybe then paint the brick and paneling. Hard to tell without seeing these in person...

How/what would you do to the ceiling?

I agree with everything you just said Barnhart Gallery! I think the pecky cypress style paneling already looks beachy. The flooring could use some updating as well as the ceiling and vertical blinds. Try some bamboo blinds on the windows to replace the verticals.

A house I purchased had the same paneling problem. I filled in the gaps with a type of putty that acts like wood and sanded then painted. You could not tell it was paneling. You can remove the dropped ceiling but I am sure you will find problems and will have to repair it.

Actually, a nautical theme may emulate a harbor or fishing locale along a river, bay or the ocean, like the Chesapeake Bay or the coast of Maine.
Walls can be red, white and blues. This pretty much make up a nautical beach decor and there's no restriction on how the colors are combined. Personally, I would like rustic white walls with a lightly ragged light pastel blue, almost "fuzzy" on the wall. (I hope you got the idea) Anyways, the walls may be light blue or dark blue; or three walls may be white with one red or blue wall for accent. Think dark woods for the floor, if your walls are lighter, to emulate wooden boats of yesteryears. Area rugs may be creamy white to balance the dark walls and/or floors. Are you a patriot? Then, swing the opposite direction with a red and blue patterned rug to contrast against white walls. Pictures may be of tall sailing ships or lighthouses.

If it can't be sheet rocked, they make a wood suspended ceiling that comes in natural and could be painted white.
http://classiccoffers.com/index.cfm