Your medicine cabinet will be relatively fixed in height for usability. Wainscot can be a variety of heights. It would be a personal preference in my opinion.
Here are some images off Houzz:

[Traditional Bathroom[(https://www.houzz.com/photos/traditional-bathroom-ideas-phbr1-bp~t_712~s_2107) by Santa Monica Interior Designer Courtney Blanton Interiors

[Traditional Bathroom[(https://www.houzz.com/photos/traditional-bathroom-ideas-phbr1-bp~t_712~s_2107) by Los Angeles Architect Tim Barber LTD Architecture & Interior Design

[Traditional Bathroom[(https://www.houzz.com/photos/traditional-bathroom-ideas-phbr1-bp~t_712~s_2107) by Coldspring Tile Stone And Countertop Haleigh Stallworth

[Traditional Bathroom[(https://www.houzz.com/photos/traditional-bathroom-ideas-phbr1-bp~t_712~s_2107) by Cambridge General Contractor Charlie Allen Restorations Inc

[Traditional Bathroom[(https://www.houzz.com/photos/traditional-bathroom-ideas-phbr1-bp~t_712~s_2107) by San Francisco Interior Designer ScavulloDesign Interiors

Thank you for all the pictures! I definitely like the look of the height being below the mirror. I had a hard time envisioning what it would look like with a decorative scroll liner and whether that would make it look to "busy", but after doing a mock up, we've decided to go with the shorter height.

How does the mockup look in proportion to the height of the ceiling? Some have said to not have it at the 1/2 way mark as it is not as pleasing to the eye. I think 1/3 or 2/3 would be fine. Having said that, mine is not 1/2 nor 2/3 :) It is where it worked best for my 7' ceiling and the backsplash that I wanted to put in.

Looking forward to seeing your progress and finished project. It will be fun.