Drywall/Buttonboard repair question

The other week I found a leak in the 60 year old sink in my second bathroom. The plumbing there is in horrible shape, the sink was chipped and rusting, the faucets crap and it was all encased in a nasty vanity knocked together out of scraps of random wood and mint green tile. I’ve been waiting for an excuse to rip it all out and this was as good as any.

Took out the vanity and sink and old tile. As expected this made a mess of the wall behind so I cut out as neat a section as possible and took it down to the studs. I’ve got a chunk just under 8 feet long and 4 feet high to re-wall, I’m going to put in a simple pedestal sink and that will satisfy me until it’s time to gut the whole bathroom and remodel it from top to bottom.

The old wall is buttonboard - it’s sort of like sheetrock with holes in it, then some kind of mortar was troweled on top of it. It’s about 7/8" thick total. Aside from many layers of paint (and possibly some kind of old wallpaper?) it’s in good shape, except where there’s any kind of hole/cut in the wall, including the line where I want the sheetrock I’m installing to meet it.

I will fur out the studs so that I can install 5/8" blueboard level with the existing wall. That will leave me with a smallish gap to bridge between old and new and I’m trying to figure out the simplest way to do this. I’ll fill the gap behind (expanding foam, probably) to seal it up and make it close to level between the two surfaces.

What would be a good way to patch and hide the seam? The old surface is covered in oil-based paint (appropriate for a bathroom) so I can’t easily tape over the seam. If I slice off the old paint/paper I might be able to tape the joint but that will just leave a new line where the old stuff can peel off, I want to cover the joint and hold down the old surface.

At this point my plan is to fill the gap and smooth things over so it’s smooth and level between old/new surfaces. To hide the seam between surfaces I’m thinking that I’ll install a length of simple molding - wide enough to cover the seam and hide any ugly/damaged areas. Construction adhesive to hold it down to both surfaces and finishing nails into the new drywall should keep it in place nicely, then prime and paint the patch to match as best I can (it won’t be perfect but that’s fine).

Is there any other practical way to bridge the gap between the old surface and the new? Obviously I’d get a better result by tearing off the entire wall and sheetrocking it up from scratch but that’s more mess (and can impact other things like a window, etc) than I want to get into at this time. This isn’t supposed to be a perfect repair, just something decent that will last and look OK until I have the time to put into gutting it completely (that’s in the works but it’s down the road).

Sand the old board down to the paper facing. Cut the new board to size, but don’t install it yet.

Glue some 1/2 length paint stir sticks to the backside of the old board, sticking across what will be the seam. Use a coupe sticks per stud bay. Stuff newspaper wads behind them to act as clamps while the glue dries.

When the glue is dry, move the paper wads under the free end, coat the sticks with glue, and install the new board.

Give the glue some time to dry, then fill the seam with drywall mud. Sand off the high spots, and spread another layer on the low spots.

Sand again, then tape the joint. Coat over the tape to feather the edges in.

Prime and finish.

If the old wall is free floating then put a stud behind it. Cut the edge of the old board back with a belt sander so you have a recessed edge to fill.

No, the old wall is held to the studs as you’d expect. Think of it this way, it’s a 7/8" thick wall that is kind of crumbly at the edge where I’m installing sheetrock.

I’ll fur up the studs as needed so that my sheetrock is level with with old wall, I’m just trying to figure out if there’s a relatively simple way to bond the two across the gap, given that the paint on the old wall tends to peel off at the cut edge. I’m worried that if I strip the paint off so that I can tape the joint, that will just produce a new peeling edge of paint, which is why I’m leaning towards putting something solid on top that holds the surface down.