We removed old wall paper and the drywall (walls & ceiling) in our
bathroom needs some prep work to get it to the point where the surface
would be similar to new drywall. I've scraped off all the loose glue
etc but the surface is uneven all over. I need to lay a skim coat over
the whole surface area to smooth it out. What would be best to do this
with?

I've tried 'spackling paste' and this has turned into a nightmare. It
dries too fast. I end up created lines in the spackle as I go over it
with the 12" knife. I had no trouble getting my joint compound to
smooth out over my joint tape without a crease anywhere. This
spackling paste seems to be for smaller areas I guess. It doesn't
really work well when doing a whole wall. And yes I tried watering
down the spackling paste so it didn't dry as fast.