Do you like patterned tiles at all? Doesn’t have to be garish and you can keep the pallet simple. I’m thinking tile the whole wall, the same width as the vanity unit, up to the ceiling, similar to first picture. Or if that’s too much, then just tile the space from the sink to the mirror. I would raise the mirror a little so that it doesn’t get too splashed.

They’re fine to use otherwise they wouldn’t be manufactured. However glass is a better material. It will need templating and is more expensive than laminate but is easier to clean. You can choose a BS or RAL number to have the glass sprayed to, but if you leave it clear the colour of the emulsion on the walls will show through so you don’t have to worry in future about respraying it.

I have tiles on one wall by the sink, and mirror in a darker area. I also have wallpaper over the other (non-cooking) side of the kitchen. It's great!   Do what works for you.

Just something to consider. This is only a digital render but try to consider the colour and warmth or coolness of the upper cupboards against the colour and warmth or coolness of the worktop. If one reads a warmer than the other and they are equal in terms of lightness then they might clash. Cool worktops and off white warm tiles or cupboards are tricky. Additionally, any under counter lighting - get the best you can, with the highest CRI rating. LEDs vary greatly in light quality and temperature.