First off, nex on the silicone. Most silicones aren't paintable, if your going that route, stick with a white, paintable caulk.
Second, wood expands and contracts with the changes in temps and humidity of the seasons. This means that the gaps in the TG will open again sooner or later. The caulking will look great for a while, then it will begin to buckle and then open up. This will happen over a period of a few years. Depending on how much work you want to do, you could try caulking and painting. Then after a few years, if you find that it looks worse than your willing to put up with, then tear it down and drywall it.
Check back often, I'm sure there will be other opinions on this.