I don't think I have a photo from the same angle as your shower, but this may help. This is our master shower. The wall with the shower head and handle held shower bar is 44" wide. (That is the wall opposite the controls.) The pony wall is 27" wide and 59" tall. The pony wall plus glass door is 55" long. That means our shower is about the same width, but yours will be longer. This is our basement shower. The wall with the shower head and handle held shower bar is 33" wide. The pony wall is 35" wide and 51" tall. The shower is 64" long. I don't use that shower. It is doorless and I have asked our guests if the water sprays out of the opening and have been told very little sprays out. I haven't asked about water getting on the plexiglass we have over the pony wall. Our shower has a glass door and based on the basement shower not spraying the floor, you would not think the entire width of the glass door would get wet. However, it gets wet when I shower and I use the handheld shower head, but stationary on the bar. My husband uses the rain shower head and he does not get splashes on the door, but he gets a tiny bit of splashing on the pony wall glass. I get no splashing on the pony wall glass. Your mileage may vary.

How will one keep the pony away from the table without the wall? Yes I'd take it apart layer by layer, Maybe put some hardboard over the hardwood on each side for a working surface to protect the hardwood. Maybe the tile will come with the drywall.

Your tile has seams. No reason to think that this is any different. Just change your perspective. It's not like you're trying to make it look like the entire shower was carved from a single block of stone, right? It's really pretty and nobody is going to ding you for having a seam.

If the existing railing is sturdy (no movement), I don't see why you couldn't leave it in place, fur it out, and sheetrock over it. You would need to take the gate off, and remove those wooden buttons that cover the screw heads, but that's minor work. Once you sheetrock the two sides, add some molding at the bottom that matches the adjacent trim, and top it off with a nicely finished piece of oak lumber.