Glass block gives me the cold chills, haha --I would definitely remove it. Your idea to have a longer window would be quite interesting. If you still need privacy, just frost the glass so you are still able to allow the natural light in while maintaining privacy without the need of a window covering.

I don't know...I kinda like funky. Put some decorative window film on it. OR make it into a built in shelf with glass shelves which let the light through.

Glass block for a window doesn't bother me, especially as here, when it's helping with what would otherwise be privacy and moisture issues from the shower side. (Glass block as a wall is just Too Unfortunate, in contrast.) I think I'd leave it for the light unless it really screws up your layout options.

Thanks all. Some interesting ideas to play it up.

I too would remove it... since it is not going outside, I would expand the size either horizontal or vertical and get a nice piece of patterned glass or beautiful stained glass ( depending on you design style )... Be bold so it looks like it is there for a reason and not just a patch...