Before I continue onto the kitchen, I have to work on the first floor flooring. It doesn't need staining, so that's why I was able to wallpaper before I began working on it. It just needs sanding and varnish.
One quick reference point to make about flooring. I will be using templates for the application of the second floor flooring. If your dollhouse is wired, you should do the same thing. Because the flooring is applied to a template, away from your dollhouse, you can add it before wallpapering or afterwards. It doesn't matter. If you are doing a rehab and you want to salvage the original floors, like I am doing, and they need staining, finish them prior to wallpapering. You do not want to accidentally stain your new wallpaper.
The wood flooring of this dollhouse is actually in good shape. It has a few minor buckles along the edges but they can be completely hidden with baseboard molding.
I sanded the floors with fine grit sanding paper and gave them a first coat of varnish. Once that dried, I sanded again and applied a second coat. The floors now look good as new.