I don't think it's quite as simple as you're picturing it. If you leave the existing ceiling joists exposed, they likely won't be very nice to look at (even painted white). Yes the roof would have to be insulated by some means (come on, you live in the Northwest). Trying to get drywall up in the "attic space" in large enough pieces (with the ceiling joists in place) to make finishing a reality, would be a REAL pain. Removing the ceiling joists to make an actual vaulted ceiling as it should be, will take the advice of a structural engineer and will be quite costly. Those joists serve a purpose in the structural integrity of the building.....