Trunk Refurbishing - Mold/Mildew Damage / Odor Problem  

I am trying to clean up an old trunk that has a mold/mildew problem and I am running into some issues.
Idea #1 - Strip the trunk down to the wood, then stain and varnish.
Problem #1 - I have striped out all the lining and cleaned (bleached) the inside to kill the mold/mildew. However the wood is fused to what best could be described as heavy construction paper (see pictures). The paper is still causing a strong odor. Wallpaper remover was useless and scraping is going to take years. The paper is really strongly fused to the wood (and very thick).
Question #1 - Any recommendations how to un-fuse the paper from the wood frame?
Idea #2 - Instead of stripping the trunk all the way down, remove as much paper as I can, apply a "sealer" to the inside and paint over.
Question #2 - Any recommendations for a "sealer/primer" that is mildew resistance (just in case) and will prevent ODORS from escaping? I found the Kilz brand at home depot but unsure which to use (or if its the right product). I need to find something that nothing can get through.
The goal is to make the trunk useful. I am not worried about preserving or creating value. Any advice is greatly appreciated.
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