2/3 of the entire room height

How tall are your walls? In my bathroom the wainscoting is 36" from the floor and I have 8' walls. Some people like to take it halfway up the wall as in pic #1, some people like it higher as in pic #2. [houzz=]
[houzz=]

In a normal room, it is generally chair rail height, which is the height of the back of a dining room chair. The bathrooms are done at several different heights. Most common are: the same as dining, same as backsplash, just under the mirror, or just under the light switches. some go a bit above the light switches.
https://www.houzz.com/photos/bathroom-wainscoting-phbr0lbl-bl~l_886

They are 9 foot ceiling. But very small bathroom.

42 & 48 would both play havoc with the light switches in my region.

If you have a small bathroom a taller wainscot height will pull the eye up vertically, whereas a shorter wainscot will make the room feel larger horizontally..

What about spacing of strips of wood. How far apart should I make the strips of wood? Which way makes the room seem larger.....closer together or further apart?

That depends on your preference, I like to use 2 1/2" stokes with 14"-16" panels in between...

2 1/2" stiles...damn autocorrect!!

I prefer this type for a small room, but others are fine too.

Breadboard looks great in small spaces,you can get it in 4' x 8' sheets like plywood..

You can also get it in wallpaper which looks just like the real thing after it's painted.

I used this style in my living room...

I have to remember to try the wallpaper some time in a small powder room. There is a better selection of molding for chair rails that you don't have to dado.

Fred, it really does look just like the real thing once it's painted. And at $12.99/double roll, I think it's cheaper, too.

I'll bet it is cheaper, but for the time I spend trying to get a suitable top rail that the customer likes for the 1/4" stuff, I could pay double.

So if you install the real thing, there's only one choice in top rails?

No, but most moldings they pick can't be botched on the bottom to go over the 1/4" wainscot properly. It would take out part of the face detail. Otherwise you have to just butt it up to the top, and that rarely gives a professional look.

Darn auto correct. Notched not botched , although that is what it ends up looking like.

For a big job, I would get it custom milled. It is just that nobody stocks anything except one or two styles here.

Ok, thanks! I love auto-correct! Makes me smile everyday!