Woah, such a lovely home!

i have to say that paying cash for a job so that the worker can avoid including payment for their tax and GST is illegal and party to fraud ..the extra payment is not for your invoice it's a savings for you so that they don't have to include the payment or GST in their income for tax and i think that expecting a quality job for work for which you haven't received an invoice or receipt is unlikely and they've already produced bad workmanship twice... i wonder if they repaired the dampproofing and flashing around the window and if you will have a similar problem in future?..i would patch up the grout and clean off the tiles and keep an eye on the wall so that if/when the leak returns you're ready to employ a professional to do a quality job

before making any decisions about the impact on light try a small long cheap venetian blind so that you can really understand the impact of any sort of blind.. the advantage of the adjustable blades on a blind or shutter is that you can adjust the amount of privacy, light and the direction of the incoming sun...in the meantime the cost of any changes will depend on labour costs and there will be installation costs for windows with or without changing the walls and i think smaller windows with part walls would be more expensive than just replacing the glass but would probably create a much more comfortable space but if you plan to do anything it's so much better to achieve an improved result and that will always cost more than expected ...it's hard to tell from the photos but it looks like the room may have originally been a verandah with a lower floor and before making any realistic suggestion we need a plan of the house with dimensions, outside photos of the windows walls from the front and sides and a google earth image of the roof from above and please describe your climate

As a quick fix, see if you can buy a photo frame the same size as the window space. Either put a photo in it, or take out everything but the glass, so it will still let light in. Then attach to current louvred window. However, there are probably laws for bathrooms that say you must have an air outlet, which your window is. So don’t going changing anything permanently until you have checked out the apartment ventilation rules.