If I use the term 'rest room' or 'restroom' to refer to a room for people to sit and take a rest besides answering the nature's call, will it be confused in a way with American English for toilet?
Or, there should be a different phrase like 'rest lounge' that would be more commonly used?
It wouldn't work in the U.S. at all.
If you told me that someone spend a few minutes in the rest room and returned feeling refreshed, I would assume you were talking about the toilet (and giving me more information than I really wanted to know).
I'm not a teacher, but I write for a living. Please don't ask me about 2nd conditionals, but I'm a safe bet for what reads well in (American) English.
Good afternoon, jiaruchan.
(1) This is a very delicate matter.
(2) In the United States, many (most?) refined people do not usually say,
"Where's the toilet?"
(3) People ask in more gentle ways:
(a) Where is the restroom?
(b) Where is the bathroom?
(c) Where may I wash my hands?
(d) Ladies (not men) can ask: Where's the powder room?
(e) Some people are a tiny bit naughty. They will ask: Where's the reading room?