We moved into a house built in the late 70’s that had all of the original wallpaper. In one bathroom, the wallpaper was exceedingly more difficult to remove, so a great deal of spackling and sanding were required. I am concerned about painting this room as I do not want to have the appearance of a patched or flawed wall and I understand that a higher sheen paint may show the flaws more prominently.
After you have gotten the walls to a satisfactory smooth finish, PRIME with a drywall primer. Do not use a stain kill primer such as Kilz. Try your local paint dealer for a primer made specifically to use on drywall. As you apply the primer take note of areas which need some more smoothing with spackling. There will be some. Repair those areas and spot prime. This will stop the "flashing" problem you have with coatings which have a sheen finish.