It looks like real tongue-in-groove paneling and not that cheapo stuff that comes in 4' X 8' sheets. You could paint it, although you may have to use either sandpaper, liquid sandpaper, or an appropriate primer first. It could have sheetrock under it, or it could simply be fastened to nailing strips attached to the wall studs. I would ultimately choose to remove it and have a clean, painted, sheetrock surface, but that would likely be a lot of work.

The blue bathroom is awesome. Just add better lighting and get a blue toilet seat from Bemis.

Really IMO bathrooms are the spaces most often in need of redo in old houses and I would do both to bring up to new waterproofing standards and make them what you like there are things in old houses worth keeping and some that just need to be redone to suit your life.I would however wait for a bit to see how each functions for you before wasting any time or money on the ones there.

Sure, you can paint it, but I agree that unless there's something structurally wrong with it, I'd leave the blue bathroom alone--it's fabulous.

I'd paint the top one, though.

I love the blue one, and think it should be left like it is. I would like to see a better picture of the other one.