What's the best way to remove Plaster/Lath walls and replace with Drywall
Be careful with a roll out dumpster , not a best thing to have on a black top driveway in the summer months.
In addition to fix the damaged plaster you need to remove all of the lose stuff and use a BASECOAT over the lath and finish of with gauging plaster.
Google red top or structo gauge.
Muding over crumbling plaster with durabond is only going to last as long as the surrounding plaster does.