These tradies are cowboys . I have never seen a mess like that in a bath or else where in over 30 years . The bath normally sits on a bed of concrete slurry or if it is a cast iron bath it should be supported by either feet or the hob. The bath should have enough room under the edges to allow the tiles to go under the lip so a proper silicon seal can be applied all the way around the lip of the bath. As for the insulation it is not necessary to have it wrapped in any water proof protection. If the water is getting onto the insulation then you have bigger problems and from the look of the photos this looks like a definite future possibility.I like to put insulation batts all the way around the bath to try to retain the water temperature for as long as possible,not many people do this though ,but the more you insulate things the better. Looking at your photos the pipework connecting the waste is broken off so the hob will need to have atleast one side pulled off or an access hole cut into it to connect the plumbing. I would be getting these plumbers and builders checked out,if the photos are any indication to go by then there would be other areas of faulty workmanship for sure, -sorry to tell you.

I had a bath shaped one in a prior house. I loved it. Can't remember the brand but it was mid range from Reece, and never has any problems. I picked it based on jet position for my creaky old back. I used it weekly.

We had our claw foot bath professionally restored as re surfaced over 20 years ago and I gold leafed the claw foot and shellacked it numerous times it looks fabulous the bath still looks as new today as it did 20 years ago, we looked for a professional re-surfacer of bathrooms to do it, I finished off the claw feet as mentioned, we bought the bath that was being used as a sheep dip on a farm so it was much worse than your bath, we live in Adelaide but I am sure there would be prfessionals in Melbourne, just google and then look for feedback of their work, good luck.

For vanity top, chose either a laminate, or engineered stone such as quartz eg: caesarstone, Essastone or silestone.You can get some wonderful laminate colours now, at very budget conscious prices. Look at Laminex and Polytec brands. Acrylic bench tops, in my opinion are dated. Have you looked at the semi inset basins. Basins really come back to personal preference for shape, height. If you have a basin on top of bench top, then install taps in the wall. If you choose inset or semi inset basin then taps installed in basin. Shower must be no smaller than 900 x 900mm. Freestanding bath would be a waste of space in your bathroom. I have attached a photo of a semi inset basin, (caroma) on a laminate bench top (Polytec)