Shower – How to fur out cement board in shower stall to match the original mortar position

I would probably use unmodified thin set to cover the gaps and give a good base for applying the tile.

Could you do something a little decorative and use a border tile around the repaired area, sort of like a picture frame? Then use a different tile to fill in the area. The border would make the change in depth harder to see.

Backer needs to go up at least 5 feet and extend a couple inches out a tub surround and used in all parts of a shower. It only needs to be in the wet areas.

For tub surrounds I normally put two horizontal pieces of backer board (goes 6 feet over tub top). Tubs are usually 5 feet in the US and backer is sold in 3x5 pieces. I then put one piece vertically on each side (going out a few inches) plus a partial piece to meet the 6 foot back wall. So I need to buy 5 pieces for a typical tub surround.

You meet your drywall from above and side from there. Just a normal join. I use mortar to fill backer to backer joins and drywall mud for back to drywall pieces. I really really suggest tiling over your backer to drywall joins too since 1/2" backer isn't as thick as 1/2" drywall. The tile coverage makes it easier and looks better. You don't need to backer behind your toilet or anything like that.

Edit - I would also note that I almost always have to add 2x4s to allow me to attach the side backer boards and allow for a firm place for drywall to meet. If everything in the room is "down" then I would actually put up 2x4 after backer - so I can make sure it meets in the middle with no cut. Cutting a 1/2 inch of backer board isn't worth the time!

Also I like a 2x4 right outside my tub external too - these are there a lot of time but not always. Obviously I would have to put this in pre-backer install. This is more for attaching your drywall.