Paint over 'em, you mean? Do you think it would take paint?
If it could be done over in a lighter color...it'd really open the place up, I'd think - make it look bigger and brighter.
Sure - you can paint paneling... in fact, some of the paneling in the kitchen in that place has been painted. It works fine to paint it.
As for the ground, it's variable there... most of the soil here is sandy, with some bands that are a little rocky and compacted where cars have parked. But a garden can definitely go right in the ground... probably easiest to rent a rototiller to churn it up.