I have to agree with JD on the mold problem! That's quite extensive from the photos. Without hiring a mold expert to come in and test, you may be putting your health at risk!
As JD mentioned, remove the wall board and any insulation, just as he suggested! Please use a mask when working in this area, if you aren't going to have it tested. Inspect the wall studs for mold also.
That mold is pretty extensive, and nothing that a DIYer should be trying to themselves, in my opinion!
Health first, structure second, pretty down the road, when you can afford it! Not all of us have to keep up with the Jones, or outdo each other. In my opinion, that's really over rated these days. Get that room healthy and structurally sound first. That's the most important. Then worry about the fixtures and such. You may have to settle for less than you want, but at least the bathroom will be healthy, structurally sound and usable.
Maureen
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Never discourage anyone...who continually makes progress, no matter how slow.
'Plato'