Reddit mentions of KOHLER K-99007-NA Verdera 24-Inch By 30-Inch Slow-Close Medicine Cabinet With Magnifying Mirror

You can definitely recess the medicine cabinet. If you are gutting the room to the studs you can get a larger cabinet (wider than the typical space between studs), but you may need build it out like a window (adding jack studs). So plan and buy your medicine cabinet early so the carpenters can build accordingly.

I highly recommend investing in a high quality medicine cabinet. You will be using it multiple times a day and nice ones make a difference. I would get as large are you can, and some even have the ability to have outlets inside so you can charge a shaver or electric toothbrushes while closed. This cabinet will be the workhorse of the bathroom.

I would also get one with a mirror in the back of the inside. (example) I've used one similar and it makes such a difference to be able to open the cabinet and do all of your bathroom stuff while still having a mirror available (even if blocked a bit). It's one of those things you don't notice until you use it and it makes a difference.

Also, the larger the mirror the bigger the bathroom will feel. Mirrors reflect light and space giving the illusion of depth.

If you aren't worried about resale, and don't plan on having kids yourself, then a shower conversion should work. The dark tile in a room without windows will be dark. Make sure you have plenty of lights if this is the direction you go in. If you or your SO wear makeup and put it on in the bathroom, dark tile may make that difficult. I would search pinterest and google for small modern bathroom or tiny bathroom and start pinning ones you respond to, and then notice the details that you like and go from there. I would also suggest thinking of the feeling you want to experience when you enter the bathroom: serenity, excitement, clean, calm, warm, etc. That will help direct color and tile choices.

Go with low profile fixtures. Here is a nicely done small bathroom. I think the rectangle sink is nice, gives you a large sink area while feeling modern and open. The spout and handles are thin and simple. The toilet is simple. The floating vanity give the illusion of space because your eye can see under it.

Niches in the shower: make more than 1 and make them bigger than you think. I also would put them on the far wall across from the shower head instead of the side wall so you don't see all of your clutter and shampoo and razors when you walk in.

And then across from the sink some sort of wall towel storage. Not that style, but something with a shelf to keep an extra set of clean towels, hooks for the towel you are using or a bathrobe, and the bar allows for hand towel to use for the sink.

That was a long write up! Hope some of that helps.