How do I make the most of this space?

My vote is to add shelves for storage or place some decorative items.

If you can't get to the upper shelves without a step stool, then consider putting glass doors on the upper shelves with LED string lights in there. I would put pretty colored glass items in that very top section.

Keep an over the toilet three shelf cabinet with doors and perhaps a plant.. Above that, install open shelving or additional cabinets for infrequently used items.

Paint side walls your all time favorite color. Install ship lap siding painted with your favorite multiple washed out colors floor to ceiling on the back wall only. Install off set shelving in what I call your "anchor" color up the back to hold and show off favorite items, i.e. pictures, bathtub indulgent goodies in glass jars and needed items such as a basket to hold extra tp, etc

If you took that shelving unit out you could add open shelves that spanned from wall to wall. That looks like it would gain about a foot more of storage room and you could adjust the shelves to the height you want and need. Use every inch (we have a small spare bathroom too).

I have the exact same issue. But I don't want open shelving, I want cabinet doors. I only have 11" of space from the side edge of the toilet tank to the wall so I've given up on having tall cabinets on either side of the toilet. Other than going to a cabinetry shop and having something custom made ($$$$$), I just can't think of anything that I can do. Any ideas?

I agree with wall to wall shelves above the toilet, but be sure to leave the bottom shelf high enough to be able to take the top off the toilet and do repairs on it when needed. If you need the shelving or want to add some extra decor on the shelves, you could have a narrow shelve lower, so long as you leave room for making repairs in the toilet tank.

Shelving is the obvious answer, but if you want it enclosed, check out an architectural salvage store for old shutters. Paint them to match the walls or to contrast with the walls. Attach them to the front of the shelves by adding boards of whatever width is necessary to the outer edges of the shelves and attaching the shutters to those. Easy access to inside, ventilated (which is generally a good idea in a moist air room), and neat in appearance while providing a ton of storage.

Shallow shelving (just wide deep enough for a jumbo roll of paper products or a lengthwise tissue box) will likely prove the most useful when it comes to putting stuff away or getting stuff out.

Use upper shelves to store things that are light and won't hurt if they fall on your head when retrieving them (like toilet paper, paper towels, boxes of tissues, etc.). Store heavier stuff on the lower shelves. Hang one of the reach extender grabber things nearby or get one that folds and tuck it into the space to pull stuff down from top shelves.

I would take down the existing shelves as they seem to box everything in. And as suggested by others i would put shelves from side wall to side wall. Pretty baskets could hold your whatevers. And maybe a nice picture above the shelving or a wreath.