I do not like subway tile in bathrooms for the simple reason too many grout lines. You show a pic of a space that is not yours but want us to tell you how to do yours that does not work . This is really not waincoting just a 1/2 tiled wall and why would you want both in space that is so small .

it is hard to say without photos but generally my opinion is that fewer changes, fewer materials used works better in a smaller space - could you choose one or the other and be happy?

Yes, it would look odd. I’d choose tile for the reason you mentioned. Make it the same height all around the room. Choose pencil thin grout lines and it will be a breeze to clean.

Yes, behind the toilet, no the rest of the room.

Keep the tile butted close and grout with the same color grout as tile for a clean finish.

same hold true for the shower tile. You are loving the tile choice not the grout accent, right?

the less materials in the bath make for a clean professional finish.

Thanks for your thoughts and advice. I HATE grout lines, and subway tile is not my first choice. However, our house has 8" cathedral cut white oak wire brushed wood floors, brick, wood beams, and natural stone. I want to keep with that look and feel. I really like this wainscoting look and would like to incorporate it: https://www.houzz.com/photos/storage-solutions-bathroom-remodel-transitional-bathroom-atlanta-phvw-vp~151025090

Daltile Fabrique in Blanc Linen has the perfect neutral coloring and goes exceptionally well with our SW Dover White trim and doors, but I think it has a contemporary look. Here are some examples: https://www.houzz.com/photos/north-albany-master-suite-contemporary-bathroom-portland-phvw-vp~642077 and https://www.houzz.com/photos/modern-bathroom-transitional-bathroom-houston-phvw-vp~5724146.

Perhaps with the right pairing of vanity and accessories, it will blend nice with the rest of the house. Hmmm. Here is a glimpse of our interior. Not sure what you call the look...farmhouse? Bohemian?