Do you want to keep the toilet in its original location? Is the door centered on the 8 1/2'?

It's difficult to understand the existing layout, but it looks like you will have room for a shower and a larger vanity in the new space that you are creating when you remove the wall.
You can leave the toilet and tub locations as is...........

Although you are removing the area to expand the bathroom it will not gain everything you may be thinking. From some dirty math I see you will gain about 4 x 4. Sizes are standardized for traditional showers ranging from 32”–48” where 38" is a decent size. Then you need to add a wall of 4" unless you get a free standing shower. That will give you a 6" or 10" (if you get a free standing) bigger vanity then you currently have.

If you start moving things around..you will add up huge costs really fast. Even then you can't do everything you are thinking.

Your most economical solution would be to grab a bit more space from the room you are stealing the closet from - 2 additional feet along that entire wall. What that would do is allow you to move the vanity 90 degrees and have a larger shower. The additional space could be either a linen closet or put back a closet in the other room. Making the bathroom 8 1/2 x 11. This will leave the toilet, tub and sink in the same plumbing locations.

A floor plan would be needed for layout options.

Looking at my floor plan above, you might consider to enlarge the depth of the shower from 3' to as much as you can. Lucidos suggestion to use some space from the other room is good. If you can't take 2' then even few inches will make a difference when washing your hair. With a glass door, you may tend to watch your elbows more than if you were in a tub because hitting your elbows on a glass door is harder than hitting them on a curtain. Or maybe you already have taken a shower in a corner shower, in that case, you know how 3 ft wide feels and you can decide.

If you can't take any space from the other room then steeling 3 in. in front of the shower might be an option. You will be left with 3'-3" to dry yourself. It is not a lot but still manageable since a tub does not use much of vertical space.

I would certainly consider a curb less shower.