Address the needed ventilation and build down an enclosed archway from the ceiling if there is room. Inside is all tile, and so is outside.

Thanks for the response. I do like that idea and look, in general, but with the size of the bathroom I don't know that that would work in my case. Overall bathroom is 5' x 8', and when considering tub/shower area, you are down to about 5' x 5' of floor space to accommodate vanity/sink, toilet, and inward opening door. I'm afraid enclosing the space further would make it a bit claustrophobic.

If you tile all the way up with the same tiles, the tiles at the top will have to be perfectly cut to look fairly decent. If you use a contrasting border, then the border becomes the strong design element that follows the ceiling line. If you use a tile with matching border that's exactly the same color, it will look nicely finished.

I have always loved the tile work in older bathrooms like GreenDesigns shows. In a small bathroom, I would suggest the same idea, floor to ceiling, using tile with less contrast.
(My favorite bathroom from that era was done in a medium purple tile, black borders and a narrow band of decorative tile with pink and purple pansies on a black background running around the whole bathroom.)

If you don’t have a lot of room, then plan to use tile borders to delineate the space. Using the black to frame the “bath” area, with all similar tile inside it, will create a visual frame, without having to build a wall. You can get the spirit of the vintage bath inspiration, without the loss of space.

Find the right tiler to work with for your project. It’s going to take above average skills. https://www.ceramictilefoundation.org/homeowners-guide-to-hiring-qualified-tile-installer

We're doing a remodel that will include a shower built into a sloped roof, so I've been saving pictures to sort through a similar dilemma myself. Most do seem to tile all the way up and across the ceiling, but if the tile cuts are too messy, here's an alternative.