I agree to decide on the shelves last. My thought is that you should NOT paint them if the bookcase around them (like the inside SIDES of the bookshelf that the shelves rest on) will be unpainted.
I lived in a house from 1962 that had a family room with paneling on two walls. One wall had a fireplace and the other had built in bookshelves.
It was a sunny room (big window across from the bookshelf wall), but I eventually painted the paneling and the bookshelves and loved it so much more! I also beefed up the trim around the fireplace and filled in the paneling grooves above the fireplace so it would look different. It was a bit uneven but we hung something there and no one could tell. I did all the work myself except for some extra tile on the fireplace and new carpeting in the room.
When we sold the house, the new owners told us that it was because they fell in love with that room!
I painted the bookshelves - all surfaces, a shade or two lighter than what I put on the rest of the paneling. One color was like cappuccino, the other like latte. I used the lighter color for the rest of the trim too.
FYI @conmama it’s likely that when you paint the back of the bookshelf it is going to look a little darker than the regular walls - be prepared for that. Especially if the shelves and other wood around it is “darker”. The back bookshelf wall is probably shaded from light, thus will appear darker.
This time last year I painted the back wall of our bookshelves (a higher quality paneling) a dark color(flat navy) and the shelves and other bookshelf areas a light color - it looks fantastic and I get lots of compliments on it.
Are the bookshelves such that you will be able to take them off while the paneling is being painted and put them back up? If so, it would make it easier to wait and decide once the wall is painted.
Yes, shelves are removable. @abasket , I hadn’t thought of the wood along the side. You are right, the shelving needs to stay stained! Thanks!
I painted fake paneling in my office/sunroom. It looks a million times better. But it was so ugly before that anything would have helped. The first time, I painted it a creamy buff color (not quite yellow) and the second time a light blue green. I really like it.
My parents had real wood paneling (pecan stain) in their 1960-built house. They painted it a barely off-white in 1979 and it looks great. I think you will like it.
In my opinion, paneling makes a room dark and dated. Has to be painted, usually over the absolute horror of any man involved. I don’t understand their thinking. The exterior of the house is wood or siding and it’s painted?? Cheap pine or oak needs to be painted to brighten everything up. But that’s just my opinion
If you like the Coastal Shiplap type of design, I would recommend a crisp white with a little sheen such as Satin finish. However this will highlight the grooves and shadows.
If you are just trying to get it to fade out of sight, flat paint
I finally tore out some thin mahogany veneer paneling that was covering bedroom walls in my house about 10 yrs ago. The Sellers we bought from were so proud of this 50s feature. All men involved were horrified and arguing against it, but it was just plain ugly and dark!! I painted one wall with satin in my D’s bedroom.
Paneling in my parents house was painted, and when it was done, everyone asked why we didn’t do it sooner. It was real solid knotty pine and was only on one huge wall…but painting it white made a huge difference in the brightness of the room. All the moldings were also white.
I feel exactly the same as @great lakes mom! Trends come and go. We too try to respect the architecture if made of quality construction and materials. When we first started house hunting, everyone was stripping trim paint – especially in 1920’s era homes. Now they’re painting it again. (I’m actually tired of grey walls and white trim, although I like the look.)
I LOVE quality knotty pine paneling, and would be delighted with a family room with knotty pine. It reminds me of northern summer vacations, and has a very cozy feel. Others have posted the opposite. If you plan to stay in the home for a long time, do what you want that makes you smile. Update a home to keep with current trends, only if you think you’ll be selling soon.
Currently mid-century has made a strong return, and paneling is a plus in many circles. 20 years ago, our 50’s house looked dated. Now it’s “in”. It will look dated again. So, we have a mix that fits our home and tastes. One room has stained mahogany on the fireplace wall. We kept that. Some of our paneling was painted when we bought. We kept that too (and re-painted to touch up). The painted paneling is very thick, so even when painted, the grooves or joints have a more pronounced shadow line. We also removed paneling in another room which was the thin, cheap, quick-cover-up kind. Painting it would have lightened the room, but it would still look cheap (imho).
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OMG Paint it!!! You will be sooo happy with the result 
@coralbrook - Probably the reason some men (and some women like me, geeky engineer) dislike the idea of painting paneling is because it is a permanent, one way transition. You have to be really sure you’ll like it better because you can’t undo it.