Hello! I don't think shiplap is the answer....it does suit many looks including vintage, but paired with your unusual tiles I think you will find they compete with each other. I also picture navy walls in a bathroom looking a bit overwhelming, and if this is a bathroom where good lighting is needed for doing makeup, etc., the navy will really suck up available light.
I really like your shower curtain, and think your idea to use a navy accent is a great one. You could go with a neutral white or off-white wall color that has a hint of pink or terra cotta in its base, to help neutralize or cancel out the pink tones of your tile. Then play up that navy just a bit more with some art that has the color in it.
A couple of possible wall colors, shown in the collages below, are Benjamin Moore Elmira White and Lacey Pearl.

Sorry, the first collage shows Cedar Key. I tried the Elmira White and it didn't look right.

Shiplap creates a pattern in addition to your tile pattern. In the picture below the white coordinates. What color are you thinking of painting the shiplap if you choose it?

Your trying to fight the theme. I agree paint the room but not blue.

1. it will darken the space

2. it will shrink it

3 it will effect the lighting

you could try a light gray, almost white.

But you can paint the tile itself .........look into it be just about as much work as ship lapping a wall!

I agree with dbtriver -- look into reglazing the tile. It's not that expensive and it looks wonderful.

Ship lap will just make the whole space feel too busy IMO. As for the tile Klenk makes a product for redoing tiles and if you want to keep the pink then paint the wall white and get some fun art.I wouls also look at a different shower curtain with all the colors in it.

Thanks y'all. I feel like the shiplap was a momentary lapse in idea judgment. Haha. I woke up thinking I must have been crazy. Anyway, I agree that it needs to be lightened. This pics were taken at night, but regardless the walls have a cream paint on them and it does create a yellowish feel (along with the lighting). this tile is everywhere in the bathroom. The shower walls. The console sink, tub and toilet are the same color. No expense was spared in 1957 regarding this bathroom. ♀️We don't mind that but the floor needs to be replaced. I need to decide a color before I decide on the floor. This is a wallpaper that I can't seem to actually locate for sale to check price. It's called "fireworks" by Albert Hadley.

My daughter's room is gray. I had a gray and white shower curtain in this bathroom when it served as the master bedroom (we have a new master now). It looked ok, but I'm ready for it to be more put together. More people see it now that she has it.

I wish the pink was more classic pink. I think I was going with blue to make it more youthful and fun. Maybe black and white? Or just crisp white mostly?

wait you're going to replace the floors but leave the tile you hate?

seriously paint the tile.

I appreciate the advice y'all! I would love to rip it all out BUT we do like the 50's look and as I said before all the fixtures are the same color. I can't replace those right now. I have another bathroom for guests that needs to be redone before his is fully gutted. I think I will do a nice crisp white on the walls and cabinets and freshen all the caulking around the floor tile and the tile baseboards. New lighting will help too. I'll update this with pics.

How about matching the paint to the grout? Probably creamy white? Neutral....

I do love your idea of the crisp white walls and black as your counterpoint to the pink.....in fact, I like that better than the dark blue idea. I wonder if you could find a stencil similar to that wallpaper pattern? Another possibility would be to do a B&W shower curtain so eye catching, the wallpaper or stencils would be unnecessary. I'm not sure how old your daughter is, but if she's a little into Boho, she might like something like this one from anthropologie? Another possibility for a strong pattern might be a B&W cabana stripe?

She is 12 and would like anything new change to it. Even a shower curtain! This is the full bathroom. The toilet seat is the wrong color. I was one shade off because I thought I could order it without the color match kit. ♀️

The blush pink color scheme is really feminine and beautiful. You should be able to play it up for your daughter in her bathroom. Here are a few inspirational items with colors that lighten and brighten. If you use pure white on the walls and cabinets, you will still need some warm tones to balance the warmth in the blush pink, or the white will appear too stark and disconnected. The peony wallpaper would be so fun!

The bathroom is actually pretty cute! Building on SewCreative's idea of going feminine and floral, you could go with this shower curtain from zazzle.com....or would your daughter appreciate romantic florals?

I really love the firework wallpaper you posted. It will really brighten the room up. I would remove the navy handtowels, replace with white and do a white shower curtain. The bathroom with the wallpaper is so cute.