You need to call a plumber.
For a bathroom wall the design should be simplistic. Paint should be a good simple and not overwhelming background for a bathroom wall. Wallpaper would be too overwhelming so that would not be as good of a choice.
Coming in around a vent pipe possibly. There really shouldn't be anything else in the attic. All plumbing is in the wall.
Check for a leak at the wax ring of the toilet. This leak will migrate out, on the surface or under the surface of the floor. Check for a leak in the wall in the back of the vanity (the vanity may have to be removed). A slow leak in a wall is likely to be the DWV system, not water.
Moisture resistant
If the "wet" is on or near a wall that has plumbing, you have a water leak inside the wall. The wall board is channeling the water to a point where it can excape - either to the exterior of the house (the "back wall") or to the interior of the house (between the bathroom and the master bedroom). In other words, gravity right?
The Bathroom Wall was created on 2002-08-27.
Bathroom Wall was created on 1987-06-07.
You can find a leak behind the wall by removing a portion of the wall.
Small bit of demolition may be required. Take the tap trim off the tap and see if you can definitely see water coming from behind the wall. The water may only leak when you have the taps on so try that too. Once you have seen the water coming out from behind the wall, you will have to remove the wall and expose the breeching piece, copper and brass assembly behind the wall and repair it by brazing it or get a plumber in to repair or replace.
I have tiled to the ceiling in my shower room because this will stop the wall getting damp. I suppose the real answer to your question is tile as high as you wish. Consider how well your bathroom is ventilated.
The leak is most likely coming from the heater core or a heater hose near the fire wall.
If it's a simple water leak your insurance company probably won't offer much help. a plumber will take care of the leak but then you'll need to get a contractor to patch up the water damage.