Can you give us some pictures of the existing bathroom. Also I would tile the walls to the ceiling and tile the ceiling area. This will hide the difference from the shower to the rest of the bathroom. I would not want to put wood in a wet area.

Here are some photos of the bathroom. The giant tub is going to be replaced with a freestanding tub. So we will be able to increase the siE of the shower a little bit. We are keeping the existing vanities (which are to the left of the shower) but will replace countertops and add some accent on the walls. We will be replacing faucets, etc. and new flooring. Thanks for your ideas.

Would the tile be the same as the tile on the shower walls?

Yes.

What metal finish for faucets, etc. would you recommend?

I have recently read about a new process called kebonization. it is a treatment that is being done to fast growing woods that essentially makes them waterproof. I believe kebonized wood is somewhat pricey, and you mentioned being on a budget, but the amount that you would need seems to be minimal and might be worth looking into. I think it would be a show stopper and, weird as it seems, a conversation piece. look into it if you want something different. The wood itself I believe is called kebony.