If that Craftsmen all is one is the same thing as a Dremel, use Dremel's 1" diamond wheel. It'd work even better on their flexible extension. It's what I use any time I have to cut a small grout joint:

I would.

Thanks, enduring. Attached are two pics of the water stain - I was in a rush and completely forgot about pics! I also forgot to mention in my post that the stain isn't straight (see distance pic) though I'm not sure if this means much. And yes, putting too much time/effort has been the concern while also balancing it with trying to be cost effective without doing further damage. Of course, I want to get this done right even if it is expensive since there's no other way around it. I'm not exactly sure by the question about accessing the ceiling from above to examine the plumbing - I don't know of any way to look at the ceiling from above since area is either covered by bathroom tiles or the bathtub. I do know that the bathroom floor tiles (not the bathtub walls) need re-grouting but we've been very careful and no water has been spilled there and as far as I can tell, no signs of moisture or water leakage there. I'm not sure if this helps at all but we could take a look by removing the shower knob and the spout to see if water might be seeping through there. As I'm considering your input and writing this out, maybe getting a plumber to come out might be the next best step. Anyways, below are the pics.

I just wanted to provide an update as there has been a new development. The estate has decided that they will replace the roof (they probably realized that it would be tough to sell a house with roof that is actively leaking). However, to recover part of the costs for replacing the roof they are increasing their sales price by 10K. In addition, I've also learned that the deck is rotten and needs to be replaced. I'm no longer interested, as the house is too expensive for me, and I think the price is a little ridiculous. But, I'm very curious to see how quickly the house sells. If for no other reason to see if perhaps my assumption about what the house is worth is completely off the mark.