Thanks to both of you for your comments. We are just in the process of making a plan so it might be hard to visualize with an existing bathroom photo. However, we also saw a number of examples on houzz where the mirror was just slightly wider than the sink (we plan to use a vessel sink) so if we go with a much narrower mirror then we believe we can fit a sconce on either side of the mirror. Thanks again for quick replies!

either do a whole wall framed mirror and mirror mount the sconces or get smaller mirrors. pendants in bathrooms are decorative IMO But do say you cant find any over the mirror that you like? there are have to be at least 800 choices, for example the one you like probably comes in a mutli head option. try kichler, hinkely, murray fiess, hudson valley lighting, minka lavery go to their actual websites and look through that way you will not be overwhelmed by say the vast amount on a lighting on line website.

Thanks again for all the good feedback. Moving the water heater out of the bathroom will be a last resort if we just can't figure out a solution to keep it all in there, but I'm determined to try my best first. The paper cutouts help with trying out different arrangements. My preferred option would be New #1, even if it makes the plumbing more complex. The water heater could be enclosed and have some towel storage above it, too. Using an 18" deep vanity should leave plenty of space to walk through (maybe I wasn't very clear in my original post, the width is 6' to 6'6"( that wall isn't in right now), so it is flexible where exactly it will land. I tried to use some actual product dimensions. Let me know if I am missing anything. New Option 3 is just a more elaborate version of the previous idea. This is really the only one I can see that could have a plumbing wall and still keep everything in the bathroom. A sliding door in the shower should work better than a hinged one, it will be a tight squeeze, but should work, at least on paper..... Option 3 is the one mentioned by wdccruise, where the water heater gets ejected. Critique away if you have anything I should know :)

You can do very skinny vertical sconces with low power lighting through the wall to wall mirror. But that’s a lot of expense to go through for a look that really isn’t the ideal.