You are going to want more than 32" for the toilet. 36" is standard (and perhaps even code in some areas???? Not here in Maine but I heard people saying that on other forums...) We have 34" and it feels fine but I dont think I'd want to go much tighter. You could solve that simply by flipping the closet and shower. So, have your shower -rotated 90 degrees and witha glass end wall- at the end of the tub (which is a nice setup you can see in many bathrooms, the tub deck can actually protrude under the shower glass wall and be a ledge or seat in the shower). Then the passageway moves to the left, and you can steal a bit of space from the other closet for the toilet. Either that of have a shorter vanity. 48" isn't a size I'd fight for. It's too short for a double vanity, really (unless you're using one of the new two-faucet 'trough" styles) so why not go down to 42" and have a better toilet area? For resale, though, you should consider a double vanity. Some people I guess expert truly huge ones, like at least 5+' long. But you CAN get smaller ones, Ikea has some great ones for tight spaces. But if you're not selling anytime soon, do what YOU like!! (But I still think you'll want more toilet space...)

4'x7' is a waste of space when it comes to a closet. It's not big enough for hanging except on one wall and a bit of the small wall. You'll get better storage in less space with a simple reach in closet with organizers. The bath itself also needs to increase in size if you want a soaker tub and a shower. A soaker tub isn't designed to work with a shower. You need a shallower tub with an integral tile flange to work with a tub/shower situation. A deep soaker tub will be a PIA to step into to use as a shower, and you'll have water infiltration issues if you try to use it as a shower as well. Also, most 4 bedroom houses would want to have 3 bathrooms. You may want to rethink your wants and needs and the small size of the space you are working with. One needs to reduce, or the other needs to enlarge. Since you say the budget is small, and this will be an expensive project, I'd suggest reducing some of your wants, and eliminating one of the bedrooms to better utilize the existing space split between the others. A 3/2 is a common configuration, and would give you more space to work with for the design. Remodels like this are costly because of working within the constraints of the old footprint and accessing the major systems. Also, integrating the old and new isn't always successful. It's just easier to do plumbing and electrical and HVAC (all of the expensive stuff) when the walls are completely open and you don't have to fight the old stuff into submission. It's one of the reasons teardowns of older homes in older neighborhoods became popular. It's less money, and you end up with more house that has more modern proportions and amenities.

I think if you want to make this bathroom modern, you're going to have to gut it. sorry. but the tub and tile are very retro cool, and you said your style is modern/traditional. I think with the right accessories, you could make a retro bath work with that. 1. remove the tub glass and frame. there are hole patch kits for the tiles. install a shower curtain. 2. remove and/or replace the wall cabinet, mirror, switch plate and toilet shelf. maybe the towel bar too (but personally I like it). 3. get a handy friend to help you swap out faucets, light fixtures, etc. maybe even a new sink with a small cabinet. 4. finally, give the room a really deep scrubbing, repair any damage, paint, and renew the caulk. buy new towels, rugs, artwork, etc. I suggest a black and white theme to go with the black tile accents. all of this would be very cost effective (maybe around 1k or so, depending on what brands you choose).

Wet rooms require superb waterproofing, powered ventilation in most climates, and complete control of the floor slope throughout the area so that the drain operates properly. They are not good choices for older houses with uneven flooring and poor access to under-floor plumbing. A more workable choice would be a pre-fab shower unit in a comfortable size. A tile shower would be much more expensive than a pre-fab shower. If you stand in your tub and mark the height of your head (or six or seven feet up, if you prefer to measure) on your three walls, you can run a line of blue tape around at that height to see how much "move around" space you'd have with a "D" or "C" shaped shower curtain rod. The height of the rod can be adjusted to fit the available space, but you can also buy different sized D and C shaped rods. The oval ones are also called "hoop" rods.