You're both right!

It took us 4 years to decide on a BS for our kitchen, so we just painted the walls with an extra coat of paint, and it was fine.

However, since you have such a neutral vanity and mirror, you could really add some punch with a fabulous tile and it wouldn't cost you much. I would just do the few inches between counter and mirror and carry it along the side wall. There are beautiful white textured/embossed/patterned tiles out there that you could really have fun with.

Here is a link that might be useful: textural white tile backsplashes

Who's going to be using this bathroom? If it's just random people downstairs washing their hands, then I wouldn't be too worried about splashing. If it's teenagers with a facial routine who use it daily, then I might think differently. Either way, I think the tile would look nice, but a good semi-gloss paint would do the job.

The bathroom is for my 16 year old son, active in sports, two showers a day, daily face washing routine...and messy. : ) I like the idea of the tile between the sink and mirror and I think we'll wrap it around the wall as well. Thanks for your opinions!