Flanged l-track is to be installed horizontally all over the interior so essentially I can cut pieces of plywood to fit all the gaps. And since the flanges of the l-track are 1/2" there's plenty room for vertical error. Hoping the panels can slide into their respective spots horizontally by bending them a bit to pass the flanges, the bottom edge of the panel tucking beneath the flange and resting on the l-track strapping (lets call it because it is essentially a flanged strapping), the top edge tucking underneath the flange of the above l-track. Then some vertical battens are installed and hand tightened, and voila! Ohhh if only its that easy, right.. dare to dream..

For finish I'm a huge fan of tung oil but I don't know if this is appropriate for a trailer interior, and that perhaps a polyurethane must be used. Since the plywood panels are installed in flanged areas they can expand and contract no problem and the flanges would hide it, thats a plus.
This is my first build and when I first joined the forum I was inspired by Roly's woody and his suggestion to go with 1/8" plywood to get the light weight I desire. Just wondering if anyone sees an issue? Or a better solution? Btw the sealing and vapor barrier will be taken care of by the taped up insulation layer which has as a layer of alumized film.