I think it would take a tremendous amount of work to patch all of that and it might never look as good as it should. I think the most effective approach would be to remove all the existing drywall and replace it.

I would put all new sheetrock around the entire room and do it right. That way, you can see whats behind the existing and do any needed repairs, and maybe new insulation too. The piece under the window that is new, doesnt appear to be done correctly anyway.