How about a horizontal weave-style fence for privacy, plenty of seating for dining and relaxing, with separate sections for each function. Moving the trees is a good idea, to open up the entire space.

As you rethink adding a fixed window, consider either a fixed window that is the long horizontal kind over the shower/tub surround and/or an octagon one with stained glass for the dressing room. https://www.google.com/search?q=images+for++octagon+windows&biw=1366&bih=673&tbm=isch&tbo=u&source=univ&sa=X&ved=0CCIQsARqFQoTCOaJ69fb28gCFcYVPgodogsLDw You could add a couple of pairs of shutters to create a pair of faux windows that look as if the shutters are closed. If you don't want a window that opens on that wall, you might consider having a fixed window and shutters that are louvered to let in some light while protecting your privacy. You might also consider a faux gable with a faux window, perhaps functional as part of the venting system for the bath.

We have that exact sink! And a very small powder room stuck in the 80s. Only difference is our door is on a side wall, and there is no window. We're no where near finished, but just ripping down the pink floral and stripey wall paper has made a huge difference (including revealing the toilet is in fact white, not pale pink). We're going to replace the rather unappealing plastic sink with a tiny ceramic one with new taps, and the old plastic cistern with a new colonial style ceramic one, and new seat (keeping the toilet base as it is in good condition, and classic style). Then new paint, and a good clean and regrout to the floor, new light shade, toilet roll holder, storage in one corner and art.

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.