I would definitely put the niche into the half wall shared with with the sink. This means "your stuff" would be hidden from view, and it would be easy to reach that while facing the shower head. If you place it on the wall shared with the toilet, you'd have to turn around to reach your items.

Well, I am of the opposite view, lol. At first glance I say put it behind the shower head, along to wall near the toilet. Is this your personal bathroom? If it was my personal BR, I wouldn't care if I saw my stuff on the shelf. The reason for the rear wall, is that if it is about 3' or so away from the rain shower head, it will probably stay dry. The side niche might get wet. In my shower I have a niche that is in my 3x5 shower. The front half of the very long niche gets wet, while the back half doesn't. The back wall in my shower never gets wet just misty from the steam. I wipe my niche and the total shower out after every shower with a high quality micro fiber. Because of the higher maintenance I keep 3 items on my shelf. The wall with the niche is 5' long. the shower head reached out about 18" I think.

My shower maintenance, I know you didn't ask, but since you're worried about mildew/mold:

I only use liquid body soap. I use Soft Soap or Dove. It doesn't build up into soap scum like bar soap. I buy dark washcloths because liquid soaps leave a dark center patch in the cloths, that you can see on white cloths. I don't use a squeegee because its way easier to use a towel sized microfiber. My towel is an auto detailing type white towel, fluffy, made in Korea. I could wipe 2 showers down before I'd have to wring it out. I like to compare the task with wiping a car down with a towel, or wiping a car down with a squeegee, haha. When done, I hang it over the shower door and its dry by the next shower. I wipe all walls, inside doors, and fixtures. There is never any mold in my shower. It looks the same as it did when it went in 3 years ago. I have a good exhaust fan. Since I wipe my shower daily, I never have to "clean" my shower. I have washed the cast iron floor pan about twice a year. I just spray the floor with the hand held from time to time. I am the only one showering in it, and don't have dirty feet :)

Enduring, do you have a link to the microfiber towels you use?

Yes cpartist. Let me look.

The Rag Company. Link to towels I bought, Edgeless Avalanche 20 x 40 Super Plush Drying Microfiber Towel.

Half wall on the right would be perfectly fine....

One limitation would be stud placement,

I had my stud framed out like you would for a window.

Thanks for the link and suggestions on that shower towel, enduring.

Carol

Thanks for the comments, we have installed the niche opposite the shower head, not ideal but the best solution considering the limitations.

Love the suggestion of the microfiber towels and other maintenance tips, thank you.