The drywall above the edge of the tub peels and cracks and I'm looking for options on how to protect it. I am comparing the cost, feasibility and appearance.
A 6" peel and stick stone look would be nice. Make sure everything is dry, scrape any loose paint off and clean the surface with some Tri-Sodium Phosphate to remove soap scum before applying the tiles. The tiles are easy to apply and easy to cut with common household tools. When you have all of the tiles installed, make sure to apply a bead of silicone caulking where the tile meets the tub and in the corners. You could use a color close to the tile color you choose in the corners first. Let that dry and then caulk the base with a white caulk for a clean uniform look. You might consider caulking across the top with the colored caulk if you are skilled at caulking. However, keep in mind that you can't touch up with paint as silicone caulk isn't paintable.