Save the pink bathroom! The original floor and the pink bath are beautiful! And obviously appropriate to the era of your house. http://savethepinkbathrooms.com/ To give you a more spacious feel, have the door replaced with a cavity sliding door - it gives you an amazing amount of extra space, we did it in our bathroom I would replace the vanity, which is obviously not original, with a custom laminate vanity with cupboards underneath in pink (top) and grey (cupboard doors/sides) or even a boomerang pattern for the top (http://retrospaces.com.au/retro/images/laminates/Renovation/FirstLadyPink.jpg) have a skilled tiler repair any areas that need repairing and have the tiles professionally cleaned and re-grouted and re-do all of the silicone, Then replace all the tapwear with new chrome taps but in an appropriate style (like these for example http://www.caroma.com.au/bathrooms/taps/retro/retro-wall-top-assemblies) and a new glass shower screen. A really fresh coat of white paint (use the bathroom product), better lighting - put a light in above the mirror (http://www.ikea.com/au/en/catalog/products/00255303/) and a fan/heater/light in front of the vanity exactly above where you'll stand when you get out of the shower. If the mirror isn't in good shape (or it may be mirror doors on a cabinet? I can't tell) then think about replacing the mirror too. You'll save a heap of money over completely re-doing the bathroom and importantly you'll be in keeping with (and preserving) the midcentury design of your home.

Our house is full of cavity sliders. Twice they were all (but one) replaced due to swelling/warping and rubbing against framework when opening and closing. Some made terrible noise whenever we opened or closed them. Hubby had a hunch they were poorly manufactured overseas and discovered that was the case. Builder sourced a local manufacturer and the whole lot, bar one, was replaced and we haven't had any further issues. The one door couldn't be replaced due to it's location - a wall would have had to be pulled down, just as co-design has described. This experience makes me think it may be a case of ensuring you purchase well manufactured doors for your climate and particular environment, and take into careful consideration the particular location they will be installed.

This with the extra width you suggested the built in bath with a large shower space next to, the shower head coming off the opposite wall to help avoid water to window, the window would be best tiled, the wall with the shower door into "The wet room could be all glass up to the vanity. There are several suitable places for towel hanging and an extra storage cabinet could be above the toilet, I forgot to add this

There is plenty of room for a walk in shower and vanity. Walk in shower to be built with a nib wall out 1000m leaving a open shower entrance of 700mm. No door. The nib wall with glass above, would also provide a ledge for shampoos etc. If wheel chair access is to be considered, then walk in shower, opening needs to be wider. But then The vanity could have drawers underneath and a mirrored cabinet above.