How to remove textured wall finish?

You could rent an electric drywall sander to do the job or else you will have to do it by hand. Not easy to do so that you can get a nice smooth finish.

You’ll most likely have to replace the paneling and drywall.

That looks very thick! Be aware you may damage the drywall underneath. I'd consider putting a layer of thin drywall over the top of what you have. Tape and texture it, and you're good to go.

I've read something about applying water and conditioner or water and soap, then it softens and you can scrap off. Look into that. Test for lead first.

I just went with the look - I painted the base color on the whole wall then used a watered-down accent shade and wiped it off with an old towel. The whole thing ended up looking like adobe.

I HAD A SIMILAR ISSUE WITH TEXTURED PAINT ON BEDROOM WALLS. I USED WARM WATER AND FABRIC SOFTENER, THIS WORKED GREAT. JUST DO NOT SOAK WALL TO MUCH WHEN YOU ARE SPRAYING THIS SOLUTION ON. USE A WIDE FLAT SCRAPER TO JUST PEEL OFF FROM THE WALL. GOOD LUCK.

It will depend on what the texture is made out of. If it is just drywall mud, take a scraper and scrape off some of the bigger chunks that will allow water to get under the paint and soften the mud. With patience and a jug type sprayer with warm water you should be able to scrape the texture off the wall. If they used a quick set type mud it will not soften with water and sanding is nearly impossible without making a horrendous mess.

good luck