Keep the layout you have. It works. I have had many tiny bathrooms (I live in NYC) and your layout space is particularly well arranged. But, you can get much better storage.

Get rid of the shelf above the toilet. Easier to access the tank. If you keep it, only keep something like a kleenex box up there - a stationary item you don't have to worry about falling on the floor.

Don't extend your countertop at all. It will be too tight. Bad idea.

Instead, make more room on your sink area by decluttering. Get a one hole single handed faucet with the faucet on top. Every inch counts and having a single hole faucet makes a big difference.

Above the toilet put recessed shelves in the wall. Like what is in this pic but above your toilet and of course smaller. Line up all of the items on your countertop and place them in these shelves instead.

Get a sink with drawers instead of doors. This is what I have and it is heaven for a small bathroom. You take a half step back, pull the drawer open, get out your tooth brush or brush or whatever, then lean towards the sink, and it closes. A lot of rocking towards and away from the vanity makes drawers the go to in a tiny bathroom. And, because everything is contained in a drawer you don't have to worry about items rolling off of countertops and hitting the floor.

It is harder to find them in 25" but vanities with drawers do exist in that size. If you get a wall hung one - instead of one that goes all the way down to the floor, it gives the appearance of a larger bathroom. I'd use a teeny trash can next to your toilet. (I assume yours is currently in your vanity.)

Get a tall recessed medicine cabinet with mirrored inside - both the back of the door and the back of the unit. Having mirrors all around helps a lot to not have to always close the door in order to see yourself. And always store your tooth brush in here or in a drawer instead of out on the counter. Read about toilet flushing germs on tooth brushes and you'll never want a countertop toothbrush again.

What is right outside your bathroom? Any closets? I have always used closet space outside of my bathrooms to store medication, hair dryer, extras of anything, cosmetic bag. If there isn't shelf space, get a system for hanging wire baskets on the inside of the closet. Simply take a step outside the bathroom and grab what you need. It just makes sense in a small space.