I also have a window like that in our shower - it may, but doesn't normally get wet from the shower. I have put in a thin venetian blind in white (made from plastic) very cheap, under $5. I am in process of making an puffy austrian blind to hang above the window, for a bit of colour I am making it from a shower curtain). It will be there for looks, I may never pull it down. The venetian gives privacy and blocks the light a certain amount.

I work in tiles and a trick you can use is to lay the tile horizontally on the 'narrow wall'. This gives an optical illusion that the room is wider. These tiles at around $50 each can certainly add up so a wise use would be to use as high impact. In the ensuite use them behind the bath for the whole wall. Use white wall tiles for the rest of the walls. If you want to add more colour, tile the spa box in an colour tile that exactly matches the blue or grey from the pattern tile, use a matching grey tile on the floor instead of white. Or use the pattern tile behind the spar, make the rest of the room white and add a matching grey vanity. It's a lovely tile but may become a bit gaudy if you have a bit here there and every where. Again with the main you will probably not get an exact match with the outer room timber floor and it could look like you tried to match it and couldn't better to go for a complete contrast. Use the same tricks as the spa bathroom and don't forget matching blue towels for a bit o colour. Hope this helps.

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Yes I agree not to paint or add an faux type treatments as over time they will deteriorate and the bathroom will look tacky. My suggestion would be to hang two large rectangular framed photos. Use a light gold colour for the frame and almost silver looking one but you can just see the gold. Keep the framed photos light and classical, not to busy. On the vanity add a tray the same colour as the photo framed or with a mirrored look. Use white fluffy towels and a Scandinavian style light colour timber towel rack. Possibly a gold colour pot containing a leafy green plant. My