Restoring Interior of '73 LB - Ensolite & Paint Help

[rkbn]

It appears that the ensolite was stripped from the interior of my Love Bug. It looks like the walls were then painted at some point.

I am in the process of restoring. My question concerns how to finish out the interior walls and the cabinets.

Can I get away with priming and painting it as is? Or should I order more ensolite and then go from there? Is the ensolite critical to keeping the elements out or strictly for insulation? Can I do without it?

If I paint and prime as is, should I sand it down, prime it with an epoxy primer and finish with Interlux? This is the best I can come up with. Are there cheaper options?

What else might you all suggest?

Please offer any suggestions for how to proceed. New to all of this.
Thanks in advance.

See stripped interior:

https://i.imgur.com/67IulB8.jpg