Medicine cabinets have come along way in recent years. The best option is to get a frameless style and integrate it into a wall of mirror. You can mount sconces thru the mirror on either side of the cabinet. If you have walls on either side of the sink, you can put the cabinets to the side, integrated into mirror again. If you have an open wall in your bath, yo can get an extra tall medicine cabinet to hold loads of stuff. There are loads more on houzz photos. Just search medicine cabinet. Sometimes you have to hunt for the cabinet because they are so well integrated. Robern makes some of the best frameless styles, but there are a ton of others on faucetdirect.com. Many even come with integrated lighting for a very modern look.

Do you want this to be a big reno? meaning, will you replace things totally or do you want to work with what you have mostly? will you add a toilet to the bathroom? if you replace the vanity, you can put in a larger one curving around the corner with a medicine cabinet above. If you replace the shower with one flat on the ground, you can also put in clear doors for bigger visual space. how about re-painting as well

I would look at this room from 2 angles, in this order: convenience (as you have young kids and need everyone to be able to fully use it) and aesthetics. Equipment and accessories: #1 - first look at what is necessary to have in this bathroom: a place where to keep soap, toothbrushes, toothpaste -- all within easy reach for all users (including not-tall-enough kids) #2 - a cosmetic mirror ? #3 - a towel rail #4 - a small cabinet for storage Ideally, #1 should be stored directly on the sink, as it's lower, within easy reach for the kids (see below photo from one of our baths): You can do this also witha smaller sink, like the one we use in the half-bath: If you'd like to keep the one you have (which is really nice), you'll have then to use a shelf (as also suggested by someone else above), and I'd propose one of white porcelain and not one of glass, as it's a lot less reliable with children around. Below, an example of what I mean. The shelf should be installed as low as possible to be reachable by the kids, but also the mirror should be much lower, so that they can use it (much more interesting for them) without having it too low so the adults can't see themselves anymore. For #2 look on the left of the mirror in this photo (if you need it): A towel rail (#3) is absolutely necessary and make sure it's one where you can stretch the towel for faster drying (like the one in the 2nd photo). The cabinet storage (#4) could be placed on the wall from the right of the mirror, as you can see we have in our half-bath (also 2nd photo): Aesthetics: I agree that blinds on the window make no sense, light should be let to flow in as it's much needed in a bathroom. If you don't have time or disposition to paint the walls (and maybe they should remain white anyway, or a light color, because this is a small space), you might use decorations from your DYI center and stick them on the walls (see an example below from my daughter's bedroom, but there are other smaller ones for any kind of space): This way, the room becomes more attractive, more welcoming and more colorful (with very low cost). I hope this helps :-)

I agree you probably need to centre the vanity and the cabinet on the wall or they could look a bit odd! You don't say why you don't want a space between the window and the vanity - just my opinion, but I would think 300mm could be quite useful for a bin, a clothes basket or box, or a small stool for putting clothes on? The only alternative to leaving a space, is to fill it with something as the response above suggested. To avoid it interfering with the window, you could make this something lower, so it sits level with the top of the vanity. This could be built in and the wall lining put over it to create a single "shelf" level with the underside of the vanity top, or if you can find some freestanding open shelving of the correct width, which could also be cut to the correct height, you could wedge that between the wall and the vanity side when fitting the vanity. Just bear in mind also, that you'll lose some of your towel hanging space if you put something too high in the space.