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Sharon, what is your end goal? Are you removing the wallpaper because you want to wallpaper again, or do you want to paint?
It seems to me that removing the rest of the wallpaper and repairing the walls would be A LOT of work. Drywalling is the best option, but also the most expensive. However, there is another solution. They make a wallpaper liner for rough walls that could save you. It is really thick (about 1/4" if I remember correctly) and just plain white. Install that over your walls, and then you can either prime and paint it, or wallpaper again.
You could refinish the plaster or go with a textured look.
It's difficult to determine if you are going to have to replace except in person.
We are also going through this same thing in our kitchen. The wallpaper came off surprisingly easy...but also part of the thin textured plaster. All we wanted to do was to paint it. There had apparently been a roof/ceiling leak years before that was fixed (new roof) but the damage to the wall behind the wallpaper went unnoticed until we removed it.