This is a repost that has been shortened!

Hi, my husband and I rent this 4 level side split house. We chose this house because of the massive yard and because I'd seen so many houses I had this one mixed up with another I saw that had laminate floors throughout, and this one only has the main floor with laminate. The landlord is great not like our old one who wouldn't fix anything. This landlord has agreed to supply the paint in the color I choose and even agreed to pay for new flooring (due to my asthma and allergies), also my choice although he'd prefer I went with something similar or exactly like what's on the main. Anyway, he's done an excellent job repairing things that have broken, etc. So here's my first and to me right now the most important problem, because it's the first room you see when you come into the house. That's my livingroom/diningroom. It's "L" shaped like you'll see in the pictures. The problem is the large vaulted wall that's behind the sofa. It's painted a pinkish color, I guess you'd say it's a dusty rose or a maybe a salmon color, but it's OLD and has faded. The main problem is this, instead of removing the wallpaper when they repainted, they painted right over the wallpaper. Now normally I would either remove wallpaper to put on fresh paint or paint over it again. However, the wallpaper is damaged and in spots peeling (which you can't see because of the furniture placement). Now I realize that just because you can't see it (the damage that is), I could ignore it, and just paint. But I would not be able to stand it knowing it's not right. I thought about doing a wall treatment such as the shiplap trick, that way the shiplap could be put right over the wallpaper and no one would ever know. But with the shape of the wall and the beam at the top, I don't know if it would look good. So then I was thinking about doing the panel wall (you know like wainscoting but all the way up the wall), but the problem with this is you'll be able to see the wallpaper between the slats, and painting over it with my main color is not going to hide it. Or do I do my best and try to strip the wallpaper and just paint after? You see my dilemma? Please HELP me figure this out! Oh yeah I don't know if the wallpaper that's still there is prepasted or what.