Our house is a 1905 Dutch Colonial/Craftsman, with a history of owners that were not nice to the history of the house.

The rooms upstairs have some sort of wood wallboard over the shiplap walls. The panels are less than 4ft wide and from floor to ceiling in height (10ft). One wall has old water damage along a seam between two pieces(no taping on the wallboards). The end of the room where we plan to (re)install a built-in is on the outside wall. I was wanting to use 2x4 framing for structural strength and behind the plywood back install insulating panels (the house 'breathes' well).

I'm wondering if we should remove the wallboard that is going to be behind the face of the built-in before installing the framing and insulation.

Is it possible to remove the old wallboard without damaging it, and then use it to replace where the water damaged pieces are?

How can I remove the wallboard without also damaging the shiplap underneath?

Should I also insulate the wall where the old water damage is which is backed by the old central chimney?

Thanks to anyone that ideas or knowledge to share.

Monique