Since the granite has a lot of movement and is quite dark, I would suggest going with a cream subway tile.

I'm not sure if I would even add a backsplash. The granite is busy and the tile may only increase that feeling in this small room. I would use a great paint color for drama and your window is so pretty as well and it would become more of a focal point.

Yes, I was definitely thinking about not using a backsplash. What color would you paint it? I'd like to keep that as an accent wall and paint the one wall if possible. There is a diamond plaster finish which is pinkish.

I think a small bathroom is better to be painted all the same color for continuity and flow and I would chose something with a bit of an impact, but are you saying you are keeping the plaster finish in the pink tone?

I don't have to. The rest of the house is the plaster with the pink tone. I could redo the bathroom with a product called Variance which is a plaster finish. Any suggestions on the color?

If you are doing a back splash in tile I prefer the lighter of the two. Is it too late to request a matching granite splash? I would want at least a 2" splash to protect the wall from water!

Too late for the matching granite. They wouldn't do it because the walls were crooked because of the plaster. I could have had the walls fixed but I didn't know that at the time. The plaster is completely waterproof as is the Variance. Any suggestions for color ? Would you change one wall color and leave the rest with the pink tone?

You may want to pick up a color from the granite and I think a mid to dark grey would be impactful. Just make sure you use a waterproof sealant between granite and wall to stop any water.

Yes, I think that a dark grey would be nice.

I actually like the dark for contrast but in a solid pattern. maybe a honed dark stone tile like black tumbled marble. I would only do a small (4 inch?) border instead of a full wainscoting.
If you can find that peachy tile in a plain solid pattern and color match the walls to it that would keep the backdrop uniform and let the stone be the star.

I would stick with 1 wall color in a room that small. Accent walls look dated and changing color in a room as small as a powder room tends to accentuate its small size. Remember less is more!

What color would you recommend?

Grey to compliment your granite. It's also a modern color.