More than likely yes, but there is alot more info needed. Brand of window if possible? Type of window? What the window is made of? the wood rotting has no bearing on your condensation problem, the seal on the insulated glass unit is shot, causing the moisture problem.Pictures may even help.

Many replacement contractors can create new openings. Be sure they have the necessary skills to perform that particular type of work. Simply asking if they can do that will usually suffice. Most companies avoid headaches so if its something they are uncomfortable with, they will tell you. This not only requires creating a new opening but installing a header. A great question to ask a prospective contractor is whether or not the new opening requires a header. If he says no, simply move on to another guy. although most experienced window contractors can do this and its simple, it is very labor intensive and can be costly.

If you want a bigger window then you need a bigger header so are you willing to rip out the wall and add the larger header. IMO keep the header the same and just replace the bay with a picture window. I see not reason to make it lower but that can be done with some work and mess. I do think you should draw out what you are thinking to see the look I llike windows to be the same ideally or very similar in height and style. or else the exterior gets very busy looking New front door is needed for sure as the one you have in no way works with the house and I happen to like double doors at entries just for the practical reason it is easier to move stuff in and out a simple double door with glass would be my choice. As for color of siding I think you need to wait until all the windows are in and the new door chosen. For sure no grids in the windows and you need to decide what style of exterior you want. IMO you could go cottage ot MCM so take some time to think about the style since the windows will need to reflect that IMO.Your fence idea book says contempory or MCM so is that the road you are travelling. If so then all the windows IMO should also be the same style and the same height off the floor along the front of the house and it would be good to see the whole house.

If you remove the bay window, the head and seat board, and the exterior "roof over the window"," you will have a flat rough opening. You can work with that but it sounds like you want to shorten the width. Are you also changing the siding? How much work would it be to make the window centered? Pretty straightforward except you are going to have to patch the siding together if you aren't changing it. Also, it looks more like a bow (6" radius =/-) rather than a bay (30 or 45 degree).