It is a good idea to create a shower/bathtub combo, and turn part of the existing shower into a closet. That double sink is going to be tight. Are you removing the tile from the walls?

I agree the shower/tub is needed for a 1 bath house. I don't see any reason to do sinks. There's not enough space for two people in the bathroom, so be realistic in your expectations. How big is your tub currently? Don't lose the charm of this home.

Yeah, you couldn't guarantee space for two to stand, with the current toilet placement, and it's not worth the cost to move it two feet. A 48" double sink won't leave you much countertop anyway.

48" Rigel Large Double Sink Modern Bathroom Vanity Cabinet · More Info

Tear out all the wall on the left and make a really great tub/shower with a glass enclosure, and then enjoy the extra storage. You can make the mirror feel bigger by getting a recessed medicine cabinet with a full-mirror face. And hang some decent lighting over it too. Find other ways to inject some luxury -- a marble countertop, or some glitzy knobs on the vanity -- and don't try to cram the place so full you end up crowded all over again.

Great ideas! Yes, will be getting rid of all the tile- it's the same on the floor as well. Again, not sure where to begin there- would like something that would compliment the house- we have sort of a modern/rustic thing going on through out.