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[email protected][/quote]What type of plywood would you recommend for veneer and what type of adhesive would you use? [/quote]
Well, the plywood choice is up to you. If there's any contact with water, though (i.e. in the bilge), plywood will be a poor choice. For interior coverings only, though, 1/8" or 1/4" plywood in the species of your choice could finish that area off nicely. I used standard cherry plywood for nonstructural coverings in my cabin. It's important that it stay dry, though.
As rough as it is, and will likely remain, I'd use a combination of a flexible adhesive (something like polysulfide) and mechanical fasteners. Hold the fasteners towards the edge of the plywood sheets, where they'll be less noticeable and/or can be easily covered with trim.
Alternatively, you can try to smooth out the existing fiberglass and simply paint the area. Again: it depends on your aesthetic expectations.