The blue stuff is a latex sizing. As long as adhesive is washed off, the sizing can be left and painted over with an acrylic (latex) primer or finish coat. The sizing is a strippable surface that protects the wall.
The wall paper may be vinyl and the outer layer needs to be stripped by pulling it off leaving the paper and adhesive to be stripped chemically or by steam. Add a small amount of dish-soap (1/2 tsp) to your vinegar (1 cup/gallon) or DIF solution to improve penetration. A hot solution works faster than cold. Have you tried steam? Wagner sells a power steamer for less than $50. I have used it with good success on vinyl and paper wallcoverings.
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