My default wall covering in all my shop spaces is peg board (painted with a light colored semi-gloss paint to make it easy to keep clean and to brighten the space), even where shelves, benches, or cabinets will be going. That makes every non-covered wall space available for hanging tools and materials, even under benches and over doorways. The photo to the left shows part of one wall covered with some of my tools for removing dents from band instruments. I keep some smaller and more fragile tools and supplies in drawers and plastic parts boxes or on shelves, but with peg board everywhere I can fit a huge number of tools--along with steel, brass, aluminum, and plastic rod stock--into a relatively small space.
Bill