Tiny Home Interior?

They make thin drywall panels. It comes in 1/4" and 3/8". It will cost more than the standard 1/2" stuff, but you won't need many sheets. There's also plywood with a real wood veneer surface layer. It's very very light. I don't know if you consider plywood to be toxic or not. It's got glue in it, but many kinds are formaldehyde-free. Wainscotting may be more work to install but it's solid wood and fairly light. You may not find much of any of those things at big box stores though they should have wainscotting. You'll have to go to a place that specializes in plywood. Around here, I'd look at Windsor Plywood.

don't try to go with anything other than what is needed for a home. Drywall. You can get them in thinner than standard, but they are less durable, your call. Dryall may be a bit heavier than wood paneling, but it's more durable and will last you longer.  It's also cheaper.  I had originally thought of panel board, and then paneling, but the panel board really wont' hold up to what you want and the paneling is too expensive. Just go with Drywall and you'll be much happier with the finished product.