Ballard Designs had some huge panel antiqued mirrors a couple years ago, I just looked and they don't have them now, but they were beautiful and I wanted a whole wall of them. If you think you might like to keep the mirror, I like the idea of trying to get the look Ballard was selling, by adding framing (even mullions maybe) to make it look like several tall mirrors, which would give it structure and vertical thrust, and antiquing over the smoked mirror. The ones in Ballard were so heavily antiqued they really didn't function so much as a mirror. To see if you like this, get some brown construction paper (hardware, paint or big box store) and make three big frames, tape them on. You could actually temporarily antique the mirror with some kind of water based paint that would come off easily, in the French dry brush look (paintbrush, dip in paint, blot it off so it's almost dry, then streak the mirror with it, maybe throw on a few flicks...) I do not think the mirror is making the room look cluttered. When you get your new floor in and the kind of furniture you want, if the room is beautiful the reflection is going to be beautiful.

An improperly built shower is only cured by ripping it ALL out and starting over. The cost difference is usually insignificant as the labor to bandaid something to an existing installation is higher than doing it all right from the beginning. Yes, it's a bit more in material costs, but material costs pale in comparison to the labor costs. Especially if you hire a knowledgeable tile technician in the first place. Only a hack would do the halfassedjob that you're wanting to do. Anyone worth their salt will flat out tell you what Cabot&Rowe did above.

If your talking about the wall butted against your tub it is a common issue. Tile person should run at least on row of tile or extend tile 2-4" beyond tub. They should also use waterproofing on that wall extending again onto that wall. The lower section of that sheetrock extending from the tub should be waterproofed about 12" from the tub under the molding. The molding itself should be waterproofed or painted with an oil or exterior paint on ALL sides. The corner at the base of your tub is one of the worst water collection spots in a bath and often overlooked in waterproofing. Water pools on tub corners and migrates down. If caulking from tub to walls fails or is done too soon water will migrate behind the caulk into the wall. Most color matching caulks are not silicone. Water migrates down from the thinset drying. Tile persons caulk next day and that moisture gets trapped behind the caulk which isn't water rated. The caulking fails or looses its adhesion. The water then migrates to the area your complaining about. It is not uncommon that when the caulk from the tub top corner to the floor along that wall is cut water will literally run out as it gets trapped. They sell corner guards for tub corners. Check the caulk and redo if needed. Unfortunately once sheetrock gets wet it can mold and deteriorate. It can only be permanently fixed by replacing.

Typically, water valve repair plates are used to cover the damage. But whomever did this job didn't do much to minimize the damage. Water valve repair plate. Here's a good set of instructions. But not easy for a novice. And a real pain if you don't have any spares of the original tiles.