Replacing drywall in bathroom
This is pretty easy.
#1 - you don't use drywall on a tub surround (and if you do you put backer board over it).
#2 - You don't know what the overhang is until you run new board behind the tub since you can't attach to something cut like that.
#3 - You do want an overhang.   There really isn't a &quot;limit&quot; on it although it cannot be so much that it overhangs to actual tub.   Yes it is too much right now but when you install a board that is flat you probably will be fine.
#4 - You have nothing to attach your pieces in the corner.
#5 - You already installed drywall that needs to be taken.
No offense - you are basically doing everything wrong right now.   Clear your head as you haven't made a lot of progress and you get a &quot;do-over&quot;.  But you need to take down what you have put up, work out the studs (different question), and then learn how to install a shower.