Walls and Ceilings - plaster ceiling a mess

Hi all, new here.
We just bought a 117 year old house and guess what i'm doing..... that's right i'm doing the endless repairs from the past owners/builder. (not that i'm one to complain.......much)
Anyways, today i removed the very badly drywalled ceiling and found a hole about 2'x2' in the plaster with a round hole cut through the lath. (wood stove i guess). There are lots of other cracks and smaller holes throughout the 12x17' room.
The plaster looks like it was put up in sheets almost like thin drywall sections??
Not sure if i should try to patch the holes with plaster or do a complete drywall ceiling done properly.

Also the walls in that room are tough too. There's a chair rail around the room and i want to keep that intact. I'm looking for some ideas on what can be done with these walls.

Unless you desire a restoration, dry wall can hide a lot of sins on old plaster ceilings and walls.