I would suggest you take out the cabinet that is to the right of the stove and use it elsewhere in the house -- perhaps in the bathroom or dining room with a hutch above it. Then, I would suggest you have someone install a lazy susan cabinet in the corner between the sink counter and the stove, meaning you would move the stove down a bit and have a small cabinet/counter top to the right of the stove. I would suggest you have the cabinets refinished in white and then paint the walls a pastel you like. If you would prefer white walls, then add white-painted crown molding and paint the ceiling a light neutral blue, such as Sherwin Williams Niagara Falls Blue. Then, I would suggest you choose a favorite accent color and use this sparingly in accessories like towels, pot holders, small vases or floral arrangements, and a valence above the triple windows. For a genuine 1940s look, you might have white ceramic square tiles with a rectangular red border installed as a back splash behind and above the stove. If you are replacing counter tops, I would suggest a light color such as white with a beige or light grey vein or striation for some sort of pattern. You might be able to find the same color and design in floor tile OR opt for a wood floor as another poster suggested.

If you are looking to keep the "period" look, then I say no. My place is from 1916 & had a gross 1980's reno. I ripped out all the ugly vinyl floor & cheap Sears sink & went with a black hex floor, white subway, dark grey grout on both. Toilet & tub were original, but I got an old "Standard" wall mount sink with chrome legs & towel bars & an antique medicine chest, light fixtures & glass shelving & towel bar off Ebay. My total job...about $5k. Help my tile guy is my neighbor, but those 10, 15, 20k bathrooms were out of the question.

Something to take into cosideration would be the amount of light you have coming into the bathroom. Obviously if you have considerable light and air the tile shade wouldn't be too much of an issue. On the other hand if the room is small and not very light filled, then the lighter shades would be preferable giving the illusion of making the room appear bigger and lighter.

Add colour . Please add colour haha . Just a thought though , instead of paint ( its a bit hard for me to visualise everything from your description -- I am a visual person ) how about maybe those translucent blue looking tiles ( yes , I know , extra cost ) , you may even 'frame' them in the white tiles to tie in with the shower , or possibly do the blue instead of the white , or even do the shower in them , and have the rest your 'white' walls . And when I say about those tiles , you can get them in square or subway or even long skinny ones , or even long and skinny but with long skinny darker blue and brushed ali ones too -- in other words , have fun and add interest !