My idea is to use T-111 siding, the one that is already primed for bathroom shower walls. I want to achieve a vintage look with paint. I'm told I should use exterior paint, which is fine. But, I also wonder if I am able to use crackle medium or crackle glue and then apply another coat of exterior paint on top of the crackle glue. If I am able to do that, what do I need to do to finish it off to protect the paint from the moisture and humidity of the shower?
T-111 siding is not a good choice for shower walls, while it works on exteriors with a good paint job, a shower has a lot more moisture and humidity than exterior siding can handle, even with a good coat of paint.
The hot water will cause the paint to fail quickly with the siding not far behind. In addition exterior paint is not recommended for use on interiors due to the chemical content, the bottom line is consider a more conventional shower and save the vintage look for the rest of the house.
Using T1-11 in the shower stall would be a monumentally bad idea. Beyond what what Mike mentioned, have you given any thought to how you would clean the surface?
Now if you're talking about using it just on the walls of your bathroom (outside of the "wet" area), that's an entirely different matter. Then you could paint or use some kind of faux finish if that's what you prefer. No need to use an exterior paint.