Ive used OSB on several garages, I prefer it for the impact resistance opposed to drywall, Im pretty hard on my garages. Oil based paint seem to cover better and seal it up vs latex. ive also used a flat latex paint mixed with drywall mud, 1 gallon paint, 1 gallon of mud mixed down with water to slightly thicker than paint consistency to seal and smooth the OSB then cover with semi gloss latex.
I typically dont fill the screws and joints but you can for aesthetics.
The ability to pull a few sheets off and has come in handy when changing the wiring for shop layout when new tools are purchased, I ended up moving my compressor and saw and added a 220 outlet for a welder and was able to just remove the sheeting and run the wiring.
You could do an OSB bottom half with a drywall top half, its pretty simple to tape the OSB/drywall joint, or just do a cheap chairrail molding. Door casing makes a suitable chair rail.
This eliminates the gouges you get when moving toolboxes and equiment around