Shower – Is it acceptable that mastic was applied as a blob on the back of tiles in shower stall

Two things:

1. Most corners or window frames aren't square, so don't use them as the guide.
2. You will have odd-cut tiles at the edges and around the window.

What you really want to avoid is having the un-cut edge of a tile close to a corner or the window frame. If it's not square then you'll have the straight grout line right next to the not-square line of the wall or window. Your eye will be drawn to this, and you'll indeed get cross every time you lie in the bath. Worse, you may have to cut a tiny sliver of tile to fill an annoying large gap...

In the ideal situation the width of the wall will be an exact multiple of the width of a tile plus the grout line. Then you can adjust things so you have half-a-tile width at the left and half-a-tile at the right. In this case, draw a vertical line dead-centre of the wall and work in both directions from there.

If your wall isn't an exact multiple of the width of a tile plus grout line, start between one-quarter to one-half of a tile to the left or right of this line. It may be best to lay out the tiles on the floor (with spacers!) so you can get a good picture of where the verticals will end up.

Finally, rent or purchase a good diamond tile cutter. Being able to cut tiles easily and quickly is really important, especially if your tiles are large!

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.