CEDAR PLANKING

you can do that but I take off the planking to whatever is there beneath. (My house is over 250 yrs and theres always a surprise in various rooms) We never had any internal bathrooms or "comfort" rooms until the late 1800's

IS your cedar planking like beaded chair rail ? Or is it just planks of wood?
Cedar takes paint pretty well

You have a few options.
Sand and cover the bare wood with polyurethane, but this will most likely get darker and more yellow over time.
Sand and stain the wood. You could choose a more contemporary colour, grey or a white wash,for a lighter look.
Sand and stain the wood a darker colour, or stain every other plank, or just a few another colour, contrasting stripes.
Cover the bottom or the top of the walls with dry wall, and leave a portion of the wood for some interest.
Remove it all and put up new drywall and start from scratch.

primer the wood and then paint with a brighter color as well. I dont like the looks of stains o old woods, they can get blotchy , thtas why many stains for "Covering up" are granular based

You are a consummate perfectionist farmer. Most people don't notice things like that. I do agree though.
I would probably paint or do a white wash, for a more rustic look.. again, depends on the direction she's going. It's kinda hard to give any advice without seeing pictures.

thanks for the suggestions! polyurethane did darken it didn't want to go that route again. I do not stain well blotchy! like the idea of painting or whitewashing. What type of paint would I use since its a bathroom?

Id look at mildew resistant paints in muted but not pastels (Pastels are too weenie looking for me)