The majority of it looks like damage to the face paper of the drywall from removal of the wallpaper, not so much water damage. If the majority of the walls look like the last picture, as much as I hate to say it, tear it out and start over with new drywall. You've spent a lot of time removing layers of wallpaper, but there's still residual backing paper that has to go. Then everything needs to be sanded, sealed with quality primer, 2 or 3 coats of mud over the entire surface, sand again, prime again, touch up any minor problems, and finally paint. Easier to just start over....