YES . . . actually Both, in terms of using Drywall or OSB. Drywall the portions that should be drywall (ie firewall between House and Attached Garage), and Drywall the ceiling if you don't plan on any other changes up there (and added benefit of fire prevention).
Walls can drywall where it makes sense. OSB maybe the section behind bench or places where you'll be rough on walls, or hanging up bunch of stuff.
Also, can drywall and then skin-coat with thin plastic for bottom portion (ie the golf-ball pebble texture that is on bathroom walls in McDonalds) - - - or stainless steel if budget is BIGGER !!
Heavy welding or damage areas can be covered with corrugated steel for the old-school look with a toprail of wood.
Life is a box of chocolates . . . choose what you like !!
With either, seal up the seams and any air gaps as big benefit of drywall is the insulation effect of sealing the envelope.
