My house was built in the 30's. and the walls are tongue and groove. Over the years cracks have formed between the slats. Is there a compound similar to joint compound that I can get to fill them before painting?
Wood moves. Fact of of life. Engineered wood (plywood, OSB, hardboard) moves less, but it moves.
In the 30's they were still using first growth lumber. Might be worth stripping and then staining, although that is a lot of work. If it's painted they may be lead based paint. Research that. Do NOT let lead paint get airborne (don't sand)
Ok. You don't like wood. Cover with drywall. I don't like quarter inch -- I'm not good enough to get it on flat, and it's not a lot cheaper than half inch. However it's lighter. While you're at that: Shine a bright light at a shallow angle: Is the present wall flat?
You will need to put box extenders on any wiring.
You may want consider taking the T&G off and bringing the wire up to code. Probably knob and tube that old. You may also find you have no insulation in the walls.