Typically, the flange of the tub surround would be screwed to the studs and the drywall would run down over the face of the flange. There are a number of different edge treatments for the drywall to give it a finished edge. The Trim Tex one recommended above is a good one.

Have you discussed this with your builder? There may be on-site issues influencing the construction that nobody here is aware of, but they do (or soon will be) if you address the concerns with them.

If your project has anything to do with an existing structure, one of the most important questions you can ask when selecting a builder is, "Do you have a magic wand in your toolbox?"

The structure is new. We had him build an addition on to our house and add this bathroom. I'm pretty sure I know why the surround is out of whack from the studs, in the contract we specified that he add backing to the tub structure to allow us to add grab bars in the future and to have something to screw the shower door into so it is not just attached to the fiberglass.

I expected him to add a stud on each side where the shower door would attach so he could screw into that, and I expected he would glue/adhere plywood on to the back of the fiberglass tub surround before he installed it to attach the grab bars according to manufacturer instructions. He did neither of those, he screwed a piece of plywood between the studs and the tub to attach those, which is moving the tub flange away from the wall by that thickness.

So now that that is all there, is there a way for this to be finished and not look like crap? I wanted to get opinions before I discussed it with the contractor because we have complained several times about the quality of his work and I want to know if this is fixable before I bring it up to him.

If you look closely at the second picture you can see the plywood (or particle board) behind the flange.

Also should there be green board above the surround in the tub area, or is it OK to be just drywall since it is unlikely to get wet other than minor splashing?

The picture is too fuzzy to tell what it is. The surround is designed to mount directly to the framing. They may have attempted to align the flange with the face of the drywall, but it should go behind it.

The framing looks around an inch too wide for the tub enclosure. And out of plumb as well .

The studs should have been shimmed. And there would be a small bump-out on that wall.

Yes, the window wall particularly looks way out of plumb.