How smooth should I sand a wall
The answer depends partially on the paint being used and how many coats will be used.

Instead of sanding, you could mud it if the remaining surface is in good enough condition, though getting the applied mud smooth and fine can be challenging.

You could simply spray texture over the surface.  A "hopper" gun is readily rented from many home improvement and contractor supply stores.  Or, if the wall isn't particularly big, there are small spray cans of texture.