How to deal with drain pipe sticking out of bathroom wall

This is the picture of a wall behind the toilet. You can see the black pipe sticking out of the drywall about 1"

The previous owner decided to build a box around it. I didn't know what was inside and it looks odd so I broke it down. This is the "before" picture:

So my question is: Is there a better way to hide this pipe?

I am thinking:

1. Put back the box with drywall. It was a mistake to remove.

2. Do smaller box around that black pipe only.

3. Paint the pipe white, same wall color, and caulk around the gaps between the pipe and the drywall. Basically it will be a part of the wall.

I prefer Option 3 but I don't know how it would look.

I hate Option 1 though because it is still very obvious (now that I notice) even behind the toilet.