I realize that ripping out a stall shower tends to lower the selling
price a bit but I'm not planning on selling any time soon.

Actually just pop a hole through the wall from the shower stall to the tub and
you will have a shower/tub, an addition in value, costs very little. Then
you're free to use the old shower stall area.

So the question is, will the cats like a litterbox tucked in the
bottom of a cabinet? They do seem to like cave sorts of hide holes so
I think this should go over big. Does anyone see anything wrong from
either the feline or human perspective? Or any suggestions to make it
better?

Sounds good to me. Use a regular cabinet and just pop a hole in the door. This
way if you sell your home, just put on a new door if they don't want your
addition.