http://houzz.com/photos/6142675

Sorry but the water line blue and white flowery tiles look old fashioned and if you're going for that kind of sandstone on the top it won't go with the terracotta tiles you have already Do like the pool and tiles that Hayda Natural Stone have posted Very nice!

it's never perfect and always involves a balance/compromise to achieve the less noticeable outcome - it's the decision with the convergence lines as to whether the base run is cut or the wall. That the wall run is cut it accentuates the pool fall more - if it was the other way around, in that the wall run comes down to a straight/horizontal line and the base is cut into that line the angle would not be as noticeable......you can fix it, and in this case arguably due to the window perspective looking straight on it's a justified request - adding water won't improve/soften the end result dramatically in this case IMO....that main thing is that it's been prep'd straight which it looks like it has been - this is only cosmetic remedial, which whilst yes will cost the contractor, you have to live with the end result so it's worth the (hard) conversation......good luck!

I quite like the idea of using same tiles as you have around edge of pool. Here are some pics to help visualise how it might look. The last one has almost charcoal coloured tiles, which would look pretty good as contrast to your lighter tiles and the blue waterline mosaics.