When I remodel a tiled area around a tub and the customer has wall area above it, this is what I always do is;
1. Remove all the old caulk around the edge of the bullnose.
2. Use a good stain block, mold inhibitor primer over the existing paint.
3. Paint the walls with a interior/exterior mold inhibitor paint.
4. Lay a straight line of painters tape 1/8" below the top of the tile all the
way around the top.
5. Caulk the top of the tile, smooth the caulk and remove the tape right
away. The tape gives you a straight professional looking caulk job.