Welcome to ATT Jimbo!
I don't see anything wrong with dot and dab (as long as there are enough dots and dabs
) or you could batten the walls with batons that are packed out to make them level, then fix you boards to the battens.
As for boards, there are 101 options. If it is a normal bathroom then you could use a moisture resistant plasterboard (available from most builders merchants, not from DIY sheds). It is not water proof but it is better at dealing with moisture than normal plasterboard.
You get various makes of cement boards like Aquapanel (Wickes) and some others that I can't remember... I think Hardi-backer board (??) They are very heavy and more suited to showers and wet-rooms than your average bathroom, more expensive too.
If you want the best of both worlds then use Aquapanel around the bath and MR plasterboard everywhere else (you can use normal plaster board too).
I have also seen people using ply and tiling directly onto it.
If you are planning a wet-room then you can use a proper wet-room system, there are loads available, normally very expensive. Some are membranes that you stick to walls and floors before tiling, some are boards that use tapes and seams etc on the joints, like Wedi board or Marmox. They are pretty expensive. The boards are lightweight and easy to work with, they too use tapes etc to seal the joints.
I guess the system will depend on what you want to achieve and how much you want to spend.