Painting over old plaster
You do need to seal the plaster otherwise the new paint won't stick as you point out.

My first choice would be to wipe down and then paint with a coat of diluted emulsion as you suggest. You might want to try this on a section of the wall before doing the whole lot to see if you get a good finish.

Dilute PVA will definitely seal the plaster and I can't think of an obvious reason why you shouldn't use the wood glue - but there may be differences in the formulation you need to look out for. How dilute did you make the mixture in the past? I've used a 5:1 water to glue ratio for sealing a ceiling I was going to paper which worked well. Again you could try a higher ratio to see if you can find a mixture that still seals but then accepts paint better.

You might be better off sealing with the dilute PVA then putting up lining paper - which does stick quite well - and then painting that. The benefit here is that the lining paper will smooth out the wall further hiding any remaining imperfections.

Of course the solution that will give you the best finish is to get another skim coat of plaster applied.