I know the best situation is NOT to have a window in the shower because of the water issues. I also know that it IS acceptable to have a window in a shower.
I would move the window higher if I wouldn't have to re-stucco. I personally like having the window in the bathroom. There are also a lot of other options like getting a shorter window to move the sill up, but these options can be expensive. I'm not sure there is a significant difference in the 66 inch high sill on my other shower and the 58 inch high sill on the proposed shower. I was just looking to see if anyone had some experience with an openable window in a shower at heights lower than 60 inches to see if it was a significant issue.
I'm still in the planning stages, so nothing is set in stone. If I put the shower/tub in that location, my plan is to drill some drainage holes, probably 2, one at each end of the window, in the inside edge of the window track (for drainage), and then tile around the window like I would for an inset shelf in a shower. Then I will caulk between the tile and vinyl frame of the window for a good seal. The window is vinyl, so water won't affect it. As long as I can seal the interfaces to the window frame, water should not get into the wall.