If this is all the counter that there is (e.g., no cabinets around the corner), then I'd go up to the ledge and then the same height for the rest of the wall, but if that subdivides the tile, then use a whole tile on either side of the window.

I'd go all the way to the ceiling around the window. I like that look.

I would just do a sheet of glass under the window or stainless steel.

Agree below sill from what can be seen right now.

What are you doing with the walls? Paint color? Trimming the window?

A matte white subway seems a bit bland. If it's what you love then do a little dramatic and do what midcentury said and go to the ceiling to add some flair...

Good luck!

Oops, no grey grout unless you want it to look like a checker board.