Plan on doing the block repair at the same time as the small retaining wall is supporting it. If you are certain there is nothing of significance buried you can remove it level it and plant whatever. It looks like just a raised bed. It's hard to say what is on the left end where it turns back...
Respect the saw or it will bite you. Hold it firmly in your hand(S). It might be the loudness in the small room making you uneasy. Take your time and think about what your doing and where the blade is and every part of your body, before you pull the trigger.
On the picture bottom left I see the seams of the plywood sub floor. Why not just take it up to the seam. It would be easier than cutting out little pieces. Definitely use plywood to replace OSB and water are enemies. Also they are not the same thickness plywood / OSB.
That would be about the best way to lay the tile. Right on the slab. If you want to bring it up to the level of the Lam then add cement board accordingly. But if you don't mind the transition go right on top of the slab. 12 mil is pretty thick Lam. Make sure whatever bull nose you use to trim...
I wouldn't take that advice you were given at HD. The fact that it's an outside wall makes it even more important. I know HD does not sell 30" exterior so the idiot was trying to sell you something he had.
Have a door made it isn't much more $$ and you will possibly save yourself some major...