Room Reno

Here is the room I am trying to paint and make into Nathan's room. I have been trying to get this done for sometime now. I am hoping I will finally get this done sometime this year. The wall need some repairing before I can paint them. I am beginning to think that maybe I should wallpaper it, but not sure if that would hide the flaws in the wall or show them. One wall has some color blocking on it. The other wall had color blocking on it also. I thought sanding the edge down would make the wall even again, but that didn't work. It also didn't help that I used some old paint to cover it and it left the wall with a slight texture. Now I don't how to get rid of it. Ugh!

Much help is needed.