I just finished tiling a shower for the first time and made the mistake of not planning out the shower niche very well. I was left with some pretty big gaps where the different planes meet. I am thinking about gluing a decorative tile around the perimeter of the niche, but am not sure if:
Any suggestions would be greatly appreciated!
1) No, definitely not the best solution. I think the best solution would be tearing out the tiles that surround the niche and re-doing it.
2) I am not familiar with wall tile, but with floor tile, you don't install new tile over old tile (typically) because of concerns of cracking if there's any movement in the subfloor. With your situation, I think the major concern is waterproofedness -- I'd be concerned around the edges of the niche whether there's any break in your cementboard/vapor barrier. Water might be able to get around the tiles that make up the 'walls' (in the Z-plane) of the niche, since grout by itself is not waterproof and may let water through.
I'm on my 3rd bathroom in our house and lots of tile! The soap dishes in the MB are a decorative tile. Carefully put down a layer of mastic, not extending past the width of the tile. In your case, you would want the corners to "overlap," making a neat "right angle." then, hold the tiles in place with blue painters tape. Give a good 24 hours to dry, then finish edges w/silicone chalk. Let completely dry!! Can't reiterate enough. A good 24-48 hours!
Check out this website to see some of the newer tile transitioning pieces. They have a link to you tube videos explaining their products which are sold at most Big Box Hardware Stores. I ran into the same issue just because my wet tile saw blade was getting dull and leaving not so perfect edges. Since my mesh-backer tile didn't sell a rounded edge for the end I was kind of stumped at the time and while at Home Depot (someone there actually showed me this product a year or two ago and now they have come a long way. This website has you tube links to demonstrate the use of their products (and I am sure there are other less expensive companies selling these products). They have quite a few new items for corners that allow us DIY'ers to finish tiling and not have to use caulk in a lot of situations. I will attach a picture of the piece I used but I did have to grind out the adhesive underneath the edge to get the piece in the about 1.5" or so. But I could grout and fill to the edge or just push it flush against the edge of the tile and it looks professional. It might be much easier to do this instead of tearing it all out and figuring out your next move. I am obviously a newbie to this site but not being a handyman. 
