Can you put drywall directly on plywood?

Yes you can drywall over plywood, mark on floor were all studs are and try to screw into studs. Drywall can butt trim and be flat taped in ,and fine bead of caulking. Same up to fireplace.

diy.stackexchange.com - Need ideas on putting drywall on old walls with plywood

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It would be best to remove the paneling. The plywood paneling is probably 1/4" thick. You can buy drywall @ 3/8" thick, so not a huge change, just an extra 1/4". In addition to your door jambs, you probably have electrical outlets to account for. Unless they have exceptionally long screws, you'll run into some trouble there. Removing the paneling isn't really hard work, or even too long a task. As suggested in the comments, it might be helpful to see what is behind that paneling so you know where to be careful. It might be quite insightful. At a time like this, you also have the opportunity to lay in any structured cabling you may want (cat6, cable, etc). The paneling may be behind your door jamb casing (the part on the same plane as the wall). I've seen it both ways. You'll know pretty quick once you start removing a panel next to a door. The casing is removed by cutting both sides with a razor knife (cuts free paint and caulk), then using a small pry bar or flat head screw driver to move the casing away from the wall. It breaks easily, so careful and listen for cracking sounds. It may be required to shim out the casing when you reattach it. You can cut strips from the paneling to do this. Just a thought, and it may not apply to you, but if you're hesitant about removing the paneling based on time, the time it takes to remove the paneling is nothing, absolutely nothingm compared to the time to properly do those drywall joints (oh, and the mess!) As for the seam where the brick is, some shoe molding should work. Based on the picture, it will be fine at the ceiling, but I didn't see a picture of your baseboards. If you're experienced with a coping saw, you should be OK with the baseboards too.

Good luck!

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How much area does a 4x8 sheet of plywood cover?

A typical 4 foot by 8 foot sheet of plywood covers 32 square feet. If your roof area is 1,600 square feet, 1,600 divided by 32 will mean you need about 50 sheets to cover the roof.

homeguides.sfgate.com - How to Figure Out How Much Plywood to Use on a Roof - Home Guides

If you can’t measure the roof directly, or are faced with a gable roof having intersecting wings and other complexities, apply a formula that will convert the floor area covered by the roof into a rough estimate of the plywood required to cover the roof. For example, if your house has a main area of 20 by 40 feet and a wing that is 15 by 20 feet, multiply 20 by 40 to get 800 square feet for the main area, and multiply 15 by 20 to get 300 square feet for the wing. Add 800 and 300 to get 1,100 square feet of total floor area. Add 20 percent to that figure to allow for the roof slope, which results in 1,320 square feet of roof area. Divide 1,320 by 32 to get 41 plywood sheets.