I have a small bathroom, with a tub and handshower, and a window over the tub, which is covered with a shower curtain, and caulked. The walls are tiled to the top of the window. The bottom row of tiles under the faucet had come loose due to some minor water leakage which damaged the old wall board (the faucet is accessible from behind). I have temporarily fixed the tile but the wall behind should be fixed. I don't have problems with any other tiles.

I would also like to insulate the exterior wall. There is no insulation in the wall. The wall at the end of the tub seems ok.

Would the entire wall above the faucet need to be redone? Is it worth re-doing the exterior wall, if so, what would be the best insulation? I would also want to make sure the walls were waterproofed correctly.