Dot and dab is a fine approach. It refers to "gluing" plasterboard to the existing walls, then skimming over the top. Very common and liked by the trade as its a quick solution that leads to a perfect finish. Whilst your old walls may be imperfect, the board will level that out. Can also improve...
As above, it's likely in zone 2 of the bathroom, so IPX5 is recommended.
If you want any more information, the zones and requirements are detailed here: http://www.denmans.co.uk/info_bathroom_zones.html