From the picture, the tub currently doesn't meet the minimum code required head room requirements of a 30'' circle of at least 80'' high at the fixture end. It would require repacing the tub with a different handed model with an integral tile flange if that minimum requirement could be satisfied at the other end of the tub. You ay need to add a dormer to be able to satisfy code requirements for headroom (and insulaton) in the space. This is possibly an illegaly done project, and you should check for the permits being pulled for it.

To do a successful WATERPROOF tub/ shower would also require more than just tiling the existing alcove. You would need to gut the walls to the studs and apply cement board, plus a topical waterproofing membrane like Kerdi or RedGuard to all of the surfaces, overlapping the integral tile flange.

To do the project in any way less than a code compliant and permitted manner would really bite you down the road. Not to mention the water damage to the home that would occur from any of the add ons without the proper work behind the walls.