Looking at purchasing this house...however, do not like the cedar wall with the 2 "window" openings. The openings (with lattice) are in the master bedroom and overlook the living room. The lattice will have to go but then not sure how to fill the openings?? Not crazy about the wall of cedar - but that is a large wall that would have to be recovered in the living room and bedroom if we change that.
Most likely there is drywall under the cedar. We had a similar wall and this was the case, it's thin cedar nailed to drywall. You should be able to just take the windows out, place some 2x4 support and drywall to match the existing wall.