Sheetrock is a low cost solution. Is this DIY or are you planning to contract out.

If DIY, are you concerned about the sweat equity needed?

There's a reason most walls are covered in sheetrock. It's cheap and somewhat durable. If you remove and replace you can insulate better. You could remove wallpaper and apply new drywall mud and sand. Messy but cheap.

Rip out the old drywall and install new? Removal is low skill but messy. Hanging the new drywall is generally a DIY project and around here 1/2” drywall is just over $7 per 4x8’ sheet. Then hire someone to mud and tape, which is the part of the job that requires the most skill. Usually it’s not too hard to find a drywall guy/gal that’s willing to pick up some extra cash.

Drywall isn’t that hard. It’s just awful to do. Rip it all out. Have a knowledgeable licensed contractor inspect it. Pay them. If they messed that up, be very afraid of what is under it. I’m betting an illegal unpermitted DIY remodel with a laundry list of safety issues. There are a LOT of code issues that go into making an attic a safe and legal habitable space.