If you just cover what you have and paint, you're leaving moisture inside the walls that will eventually rot or mold.  

Don't forget to add the fire-rated drywall into the joist-cavities as well and be sure to fill in any penetrations of the wall with a true fire-rated product. 

I am assuming this needs to be relocated outside the unit and also I need to add moisture barrier to the foundation/floor etc.It's my understanding that a regular designer cannot help with this and I will have to engage a specialist to help with this.

That said, I focus on a very different market segment (mostly 800k to 1.5 mm on the residential side) so that dictates how I approach things.Water issues are the number one cause of litigation in my line of work so I am very focused on water/moisture management. 

Fire damaged lumber must be removed as simply treating it will likely not do the trick down the road when the fire/ash smell starts penetrating into the home.

I have come up with the following options so far:-install shower with glass block window with tile surround and bath vent fan (no idea as to how waterproof this may be)-demo old tub, wall off window, install prefab tub/shower combo and bath vent fan -reframe window to be much smaller and higher on the wall, leave existing tub, install tile surround and plumbing for shower-leave as is and hope tenants don't care about not having a showerIn most of these cases it seems to really just boil down to whether I want to have a window that can be opened to alleviate wet room moisture, or install a vent fan. 

(damn you a thousand times moisture!)

Sealing the cracks would be a good place to start (good idea for water penetration, at least!)

Unfortunately, tenants usually do not know how to install them.I've seen cases where they've been poorly installed directing moisture towards the home instead of away from the home.

Seeing that flashing was not installed, you have water penetrating between the gaps. 2nd photo shows concrete spalling (most likely due to freeze-thaw cycle) and exposed rebar now beginning to rust.