Drop it in the tub area and work it into the design is a great idea.
I like to be up off the floor more then 1 inch in a basement. Keep drywall up 1.5 to 2" as long as baseboard will cover, pout 2" of styrofoam in bottoms of wall between studs, glue in place and glue drywall to it on bottom edge. So moisture can not wick up insulation. Fill behind baseboard with 1/2" treated plywood strip.