Half wall. I get that you are using subway tile, but if your tile maker has other shapes you certainly have a beautiful space that would accommodate a more artistic transition to wall.

That is absolutely beautiful

That's about 5K in labor, minimum. Art is always more expensive than "workmanlike".

I would probably get color copies of my tiles and mock up different options - I would prob say half wall but it might depend what the floating shelf looks like

I think the full wall is problematic with the sliver over the window

You don't need anything above the cabinets on the left. You could definitely tile the whole other wall, however it kind of depends on how you feel and what you like.

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