If you plan to hang things on the wall in random places and still want the fire resistance of Drywall - Do both. Set all the electrical boxes for a 1" wall, hang 1/2" OSB and then 1/2" drywall. Hang stuff on the finished wall with 1-1/4" coarse drywall screws, and you can stick stuff up anywhere you want and it won't fall down.
They make thinner drywall, but it doesn't carry much of a fire rating, and thinner OSB or Plywood won't be very structural.
Oh, and you get much better shear strength against the building turning into a Parallelogram on you in the next earthquake, and higher resistance to flying debris in a severe storm or tornado - rather important if you happen to be inside said building at the time.
It'll be impossible to make an accidental hole in the wall - just don't get frustrated and try punching the wall with bare knuckles...
Mud and tape is simple enough with paper tape, apply a thin layer of mud (4" blade) that basically fuills the crack between sheets and leave a thin layer on the joint. Then you stick the paper tape to the joint, and go over it again with the 4" knife and a moderate layer of mud. This coats the paper tape and sets it well.
For a garage you can stop there - just lightly sand with a screen pad and a pole sander to knock it flat. Though a second coat of topping mud is still called for if you find big voids and skips. For the house, a second coat is mandatory, then a touch-up and application of texture coat spatter to hide any other minor imperfections.
Once you have a nice flat surface (or at least flat enough for your purposes) a coat of PVA Primer - if you try painting without priming first, the drywall will soak up gallons of paint before it starts building a finish. The primer only soaks down so far and then it stops.
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