Many years ago I had to repair some water damage to the interior walls in the "living room" of our motorhome. I patched the damaged areas in the upper walls with the same thickness of Masonite the manufacturer had used initially (using a small circular saw blade in my Dremel tool I carefully cut around the damaged area, pulled that section out and used it as a pattern for the patch. I glued in the patch and filled in the seam around it, sanding those seams flush with the surrounding area) and then used a good vinyl wallpaper to redo the entire room. You're working with such a small area you can afford high grade wall paper. As it was going over existing vinyl wall paper I used an adhesive intended to glue vinyl boarders over vinyl paper.
For the lower half of the wall I used the individual slats of wainscot. I started by attaching the lower molding, which was slotted at the top to slide the wainscot boards into. I screwed each board into the wall at the top, but you could just as easily glue those in too. I even removed the "fake" door panels beside the front captains chairs (the coach was a side entry, no real doors up front) and continued the paneling right up to the dash. Cap it off with a top rail. It was unique, looked great and gave the room a much more residential look.
Jay & Peggy Monroe with Dolly
Can't take it with you - don't plan on leaving any behind
2016 Newmar London Aire 4553, Spartan chassis
Wrangler Unlimited toad