Can you use waterproof paint instead of tearing out plywood in a shower stall

Plywood? What's that doing there? Do you want to paint it before you tile over it, or put up a one piece acrylic wall, or what?
Regardless, there is no paint that will survive in a shower because there is no paintable surface that will survive in a shower.

Actually what I want to do is add an extra layer of protection. I plan on purchasing fiberglass panels to install over the concrete, and plywood

Your walls are concrete, as in a basement?
Concrete is porous, about 18% air. There has to be extraordinary waterproofing outside and in to keep dampness out. Never put wood or wood composites directly against a basement wall. Can you explain the entire room?