Most drywall damage looks worse than it is. Doorknob holes, anchor holes, and hairline cracks along seams can all be patched so they disappear once the wall is painted. The trick is feathering the compound wide and thin over several coats, not filling the hole in one thick pass.
Water damage is different. If the board is soft, crumbles at the edges, or the stain keeps coming back through paint, the gypsum core has been compromised. Patching over it just hides the problem for a while. The damaged section needs to be cut out back to solid board, the source of the water fixed, and new drywall installed and taped in.
Cracks that keep reappearing in the same spot, especially above doors and windows, usually mean movement in the framing. In older Toronto homes that's common and not always serious, but it's worth checking before taping it again. Mesh tape and a flexible compound help, and sometimes extra blocking behind the board is the real fix.
If you're not sure which category your wall falls into, send a photo. It's often enough to tell whether you need a quick patch or a section replaced.